Semi-Annual Report
17th fiscal period
December 1, 2014 >>> May 31, 2015

1－1－

Profile
Nomura Real Estate Residential Fund, Inc. (referred to as “Nomura Residential Fund” or
the “Company” hereinafter) was listed on the Tokyo Stock Exchange on February 14, 2007as a real estate investment corporation formed to own and invest in Residential properties,
subject to the Act on Investment Trusts and Investment Corporations of Japan. The
Company’s basic investment policy is to assure stable rent revenues and steady portfolio
growth over the medium-to-long-term.
Nomura Real Estate Asset Management Co., Ltd. (referred to as “NREAM” hereinafter), a
wholly owned subsidiary of Nomura Real Estate Holdings, Inc. is in charge of asset
management on behalf of Residential Fund in accordance with the basic investment policy
as described above. Through coordination with Nomura Real Estate Holdings, Inc. andother group companies, NREAM aims to achieve these goals and more.

Contents
To Our Investors
Summary of Portfolio Properties
Profile of the Asset Management Company
Performance Report
Financial Section
Business Structure/Corporate Data
Website

2
3
5
6
37
54
55

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To Our Investors
On behalf of Nomura Real Estate Residential Fund, Inc. (the Company), I would like to express our gratitude for your continuing trust
and patronage.
With the Company having closed the accounts for the 17th fiscal period ending May 31, 2015, allow me to present an overview of the
management status and financial results.
Continuing forward from previous fiscal periods, the 17th fiscal period saw further promotion of the property replacement strategy toenhance portfolio quality, and three properties were acquired for a total price of 6,300 million yen. Stable revenues are expected fromthese properties going forward as all are located in popular areas and are close to their nearest stations. Meanwhile, five properties thatwere expected to show decreased competitiveness in the market due to aging and other factors as well as increased maintenance costs,
were transferred during the 17th fiscal period for a total price of 1,827 million yen. As a result, assets at the end of the 17th fiscal period(as of May 31, 2015) totaled 148 properties amounting to 163,792 million yen (total acquisition price).
In terms of portfolio property management, we implemented proactive leasing activities and enhanced our advertising activities tofurther increase the high occupancy status of portfolio properties even as the period contained the year end in which there are manytenant replacements. As a result, the average portfolio occupancy rate in the 17th fiscal period was 96.8%, the highest level since thelisting of the Company. Furthermore, with regard to properties whose rents are expected to increase, active leasing activities werecarried out according to the characteristics of the properties. As a result, unit rent for the entire portfolio as of the end of the 17th fiscal
period made a turnaround to an increase.
Concerning financial activities, a conservative financial strategy was implemented as with the previous fiscal periods in order tosecure stable revenues in the mid- to long-term and for the steady growth of portfolio assets.
As a result of management activities, we achieved operating revenue of 5,678 million yen, ordinary income of 1,873 million yen andnet income of 1,872 million yen. Cash distribution per unit for the period was 11,642 yen.
The Company concluded a merger agreement with Nomura Real Estate Master Fund Inc. and Nomura Real Estate Office Fund Inc. on
May 27, 2015. We believe that the merger will lead to the further increase of unitholder value as both growth and stable management
can be expected in the future.
We as our investors for their continued support and encouragement.

Shozo Matsumura
Executive Director
Nomura Real Estate Residential Fund, Inc.

-21－3－

Summary of Portfolio Properties#

Name of Property

Location

Acquisition Price(thousands of yen)
3,510,000
1,100,000
865,000
800,000
812,000
882,000
2,260,000
1,540,000
1,110,000
1,010,000
1,350,000
1,140,000
2,980,000
695,000
900,000
650,000
1,130,000
1,370,000
1,960,000
2,340,000
2,770,000
1,430,000
991,000
956,000
941,000
1,510,000
452,000
408,000
1,030,000
1,170,000
707,000
2,030,000
1,200,000
1,320,000
886,000
536,000
464,000
3,580,000

Percentage
of Total (%)

Leasable Floor Area
(sqm)

Leasable Units(units)Occupancy Rate
(May 2015)(%)

2.1
0.7
0.5
0.5
0.5
0.5
1.4
0.9
0.7
0.6
0.8
0.7
1.8
0.4
0.5
0.4
0.7
0.8
1.2
1.4
1.7
0.9
0.6
0.6
0.6
0.9
0.3
0.2
0.6
0.7
0.4
1.2
0.7
0.8
0.5
0.3
0.3
2.2

2,950.11
1,151.34
958.98638.70934.39855.23
3,055.21
1,793.43
1,450.91
1,102.20
1,277.82
1,541.64
4,051.72
752.091,209.56
830.55
1,191.08
2,222.05
2,685.39
3,118.12
4,872.17
2,219.74
1,222.13
1,062.05
1,107.36
1,905.39
650.60439.56
1,184.81
1,277.04
793.872,087.70
1,444.40
1,302.42
1,008.39
655.27453.772,955.74

106
44
31
30
41
40
110
70
60
41
48
67
169
35
55
35
55
94
79
113
200
81
40
25
48
68
38
19
35
52
32
90
29
49
32
22
24
99

99.1
97.8
94.4
96.7
100.0
100.0
93.7
97.5
100.0
96.3
96.2
100.0
97.4
86.0
100.0
97.5
98.2
100.0
98.8
95.5
100.0
98.0
94.8
100.0
93.8
94.6
100.0
96.0
100.0
98.2
100.0
95.8
100.0
93.9
100.0
92.5
100.0
94.9

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38

PROUD FLAT Shirokane Takanawa
PROUD FLAT Yoyogi Uehara
PROUD FLAT Hatsudai
PROUD FLAT Shibuya Sakuragaoka
PROUD FLAT Gakugei Daigaku
PROUD FLAT Meguro Gyoninzaka
PROUD FLAT Sumida Riverside
PROUD FLAT Kagurazaka
PROUD FLAT Waseda
PROUD FLAT Shinjuku Kawadacho
PROUD FLAT Sangen Jaya
PROUD FLAT Kamata
PROUD FLAT Kamata II
PROUD FLAT Shinotsuka
PROUD FLAT Kiyosumi Shirakawa
PROUD FLAT Monzen Nakacho II
PROUD FLAT Monzen Nakacho I
PROUD FLAT Fujimidai
PROUD FLAT Asakusa Komagata
PROUD FLAT Yokohama
PROUD FLAT Kamioooka
PROUD FLAT Tsurumi II
PRIME URBAN Azabu Juban
PRIME URBAN Akasaka
PRIME URBAN Tamachi
PRIME URBAN Shibaura LOFTPRIME URBAN Hatagaya
PRIME URBAN Yoyogi
PRIME URBAN EbisuⅡ
PRIME URBAN Bancho
PRIME URBAN Chiyoda Fujimi
PRIME URBAN Iidabashi
PRIME URBAN Ebisu
PRIME URBAN Naka Meguro
PRIME URBAN Gakugei Daigaku
PRIME URBAN Senzoku
PRIME URBAN Meguro Riverside
PRIME URBAN Meguro Ohashi Hills

Minato-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Chuo-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Setagaya-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Toshima-ku, Tokyo
Koto-ku, Tokyo
Koto-ku, Tokyo
Koto-ku, Tokyo
Nerima-ku, Tokyo
Taito-ku, Tokyo
Yokohama-shi, Kanagawa
Yokohama-shi, Kanagawa
Yokohama-shi, Kanagawa
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo

39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78

PRIME URBAN Meguro Aobadai
PRIME URBAN Gakugei DaigakuⅡ
PRIME URBAN Naka Meguro II
PRIME URBAN Kachidoki
PRIME URBAN Shinkawa
PRIME URBAN Nihonbashi Yokoyamacho
PRIME URBAN Nihonbashi Hamacho
PRIME URBAN Hongo Ikizaka
PRIME URBAN Hakusan
PRIME URBAN Yotsuya Gaien Higashi
PRIME URBAN Naka Ochiai
PRIME URBAN Ochiai
PRIME URBAN Nishi Shinjuku I
PRIME URBAN Nishi Shinjuku II
PRIME URBAN Shinjuku Naitomachi
PRIME URBAN Nishi Waseda
PRIME URBAN Shinjuku Ochiai
PRIME URBAN Mejiro
PRIME URBAN Kagurazaka
PRIME URBAN Kamiuma
PRIME URBAN Sangen JayaⅢ
PRIME URBAN Chitose Karasuyama
PRIME URBAN Sangen Jaya II
PRIME URBAN Sangen Jaya
PRIME URBAN Minami Karasuyama
PRIME URBAN Karasuyama Galleria
PRIME URBAN Karasuyama Court
PRIME URBAN Kamikitazawa
PRIME URBAN Chitose Funabashi
PRIME URBAN Yoga
PRIME URBAN Shinagawa Nishi
PRIME URBAN Osaki
PRIME URBAN Oimachi II
PRIME URBAN Yukigaya
PRIME URBAN Omori
PRIME URBAN Denenchofu Minami
PRIME URBAN Nagahara Kamiikedai
PRIME URBAN Nakano
PRIME URBAN Nakano Kamitakada
PRIME URBAN Takaido

Meguro-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Bunkyo-ku, Tokyo
Bunkyo-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Shinagawa-ku, Tokyo
Shinagawa-ku, Tokyo
Shinagawa-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Nakano-ku, Tokyo
Nakano-ku, Tokyo
Suginami-ku, Tokyo

1,190,000
916,000
2,800,000
2,290,000
2,250,000
3,530,000
1,470,000
647,000
893,000
1,700,000
655,000
324,000
1,290,000
1,000,000
512,000
503,000
635,000
1,260,000
2,640,000
900,000
755,000
730,000
539,000
835,000
840,000
645,000
413,000
738,000
885,000
1,150,000
624,000
1,700,000
1,100,000
970,000
824,000
900,000
1,720,000
472,000
640,000
1,080,000

0.7
0.6
1.7
1.4
1.4
2.2
0.9
0.4
0.5
1.0
0.4
0.2
0.8
0.6
0.3
0.3
0.4
0.8
1.6
0.5
0.5
0.4
0.3
0.5
0.5
0.4
0.3
0.5
0.5
0.7
0.4
1.0
0.7
0.6
0.5
0.5
1.1
0.3
0.4
0.7

1,464.14
1,109.87
2,393.45
4,524.00
3,600.61
5,926.17
2,026.44
662.581,069.82
1,759.11
1,237.98
517.53
1,459.86
1,162.55
578.18507.11
1,053.39
1,755.52
2,853.82
1,739.86
1,018.72
1,774.01
810.98874.15
1,049.73
835.05576.201,384.45
1,027.44
1,773.05
961.252,106.16
1,794.85
1,536.59
1,190.70
1,100.17
2,282.62
801.30818.75
1,746.20

40
41
66
145
46
124
52
27
42
51
18
32
60
46
14
28
28
65
100
37
47
27
17
33
41
33
23
29
38
54
46
99
93
94
54
44
61
51
33
107

100.0
100.0
100.0
95.1
94.9
95.4
94.3
100.0
100.0
89.8
94.0
94.1
95.2
95.6
100.0
100.0
100.0
96.9
97.9
96.9
93.0
96.2
100.0
94.2
100.0
97.0
100.0
100.0
97.2
100.0
95.9
96.9
97.7
95.8
96.3
95.9
84.3
98.3
95.0
99.1

79
80
81
82
83
84
85

PRIME URBAN Nishi Ogikubo
PRIME URBAN Nishi Ogikubo II
PRIME URBAN Otsuka
PRIME URBAN Komagome
PRIME URBAN Ikebukuro
PRIME URBAN Monzen Nakacho
PRIME URBAN Kameido

Suginami-ku, Tokyo
Suginami-ku, Tokyo
Toshima-ku, Tokyo
Toshima-ku, Tokyo
Toshima-ku, Tokyo
Koto-ku, Tokyo
Koto-ku, Tokyo

435,000
1,780,000
794,000
412,000
3,310,000
2,200,000
705,000

0.3
1.1
0.5
0.3
2.0
1.3
0.4

543.092,225.33
944.99991.94
4,376.95
3,207.92
1,117.34

24
76
46
22
131
118
52

95.9
90.0
97.9
95.5
97.6
99.2
98.1

1－4－
-3-

#

Name of Property

Location

86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112

PRIME URBAN Sumiyoshi
PRIME URBAN Mukojima
PRIME URBAN Kinshi Koen
PRIME URBAN Kinshicho
PRIME URBAN Hirai
PRIME URBAN Kasai
PRIME URBAN Kasai II
PRIME URBAN Kasai East
PRIME URBAN Ekoda
PRIME URBAN Itabashi Kuyakushomae
PRIME URBAN Asakusa
PRIME URBAN Machiya South Court
PRIME URBAN Musashi Koganei
PRIME URBAN Musashino Hills
PRIME URBAN Koganei Honcho
PRIME URBAN Kumegawa
PRIME URBAN Musashi Kosugi comodo
PRIME URBAN Kawasaki
PRIME URBAN Shinyurigaoka
PRIME URBAN Tsurumi Teraya
PRIME URBAN Urayasu II
PRIME URBAN Urayasu
PRIME URBAN Gyotoku I
PRIME URBAN Gyotoku II
PRIME URBAN Gyotoku Ekimae
PRIME URBAN Gyotoku EkimaeⅡ
PRIME URBAN GyotokuⅢ

Koto-ku, Tokyo
Sumida-ku, Tokyo
Sumida-ku, Tokyo
Sumida-ku, Tokyo
Edogawa-ku, Tokyo
Edogawa-ku, Tokyo
Edogawa-ku, Tokyo
Edogawa-ku, Tokyo
Nerima-ku, Tokyo
Itabashi-ku, Tokyo
Taito-ku, Tokyo
Arakawa-ku, Tokyo
Koganei-shi, Tokyo
Koganei-shi, Tokyo
Koganei-shi, Tokyo
Higashimurayama-shi, Tokyo
Kawasaki-shi, Kanagawa
Kawasaki-shi, Kanagawa
Kawasaki-shi, Kanagawa
Yokohama-shi, Kanagawa
Urayasu-shi, Chiba
Urayasu-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba

113

PRIME URBAN Nishi Funabashi

Funabashi-shi, Chiba

114

PRIME URBAN Kawaguchi
Greater Tokyo Area
PROUD FLAT Itsutsubashi
PROUD FLAT Kawaramachi
PROUD FLAT Shin Osaka
PRIME URBAN Yamahana
PRIME URBAN Kita Juyo Jo
PRIME URBAN Odori Koen I
PRIME URBAN Odori Koen II
PRIME URBAN Kita Juichi Jo
PRIME URBAN Miyanosawa
PRIME URBAN Odori Higashi
PRIME URBAN Chiji Koukan
PRIME URBAN Maruyama
PRIME URBAN Kita Nijuyo Jo
PRIME URBAN Sapporo Idaimae
PRIME URBAN Sapporo Riverfront
PRIME URBAN Kita Sanjo DoriPRIME URBAN Nagamachi Icchome
PRIME URBAN Yaotome Chuo
PRIME URBAN Tsutsumidori Amamiya
PRIME URBAN Aoi
PRIME URBAN Kanayama
PRIME URBAN Tsurumai
PRIME URBAN Kamimaezu
PRIME URBAN Izumi
PRIME URBAN Esaka I
PRIME URBAN Esaka II
PRIME URBAN Esaka III
PRIME URBAN Tamatsukuri
PRIME URBAN Sakaisuji Honmachi
PRIME URBAN Hakata
PRIME URBAN Yakuin Minami
PRIME URBAN Kashii
PRIME URBAN Hakata Higashi
PRIME URBAN Chihaya
Other Areas
Total

Kawaguchi-shi, Saitama

115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148

Sendai-shi, Miyagi
Sendai-shi, Miyagi
Osaka-shi, Osaka
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sendai-shi, Miyagi
Sendai-shi, Miyagi
Sendai-shi, Miyagi
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Suita-shi, Osaka
Suita-shi, Osaka
Suita-shi, Osaka
Osaka-shi, Osaka
Osaka-shi, Osaka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka

Acquisition Price(thousands of yen)
552,000
487,000
1,180,000
668,000
700,000
637,000
958,000
940,000
385,000
940,000
350,000
1,740,000
2,390,000
1,590,000
725,000
1,370,000
2,150,000
1,150,000
1,210,000
457,000
277,000
840,000
635,000
741,000
476,000
561,000
948,000

Percentage ofTotal (%)
0.3
0.3
0.7
0.4
0.4
0.4
0.6
0.6
0.2
0.6
0.2
1.1
1.5
1.0
0.4
0.8
1.3
0.7
0.7
0.3
0.2
0.5
0.4
0.5
0.3
0.3
0.6

772,000

0.5

1,237.80

60

98.3

2,170,000
133,385,000
682,000
724,000
1,430,000
377,000
336,000
530,000
322,000
600,000
576,200
424,000
337,900
283,200
503,700
731,600
3,500,000
1,450,000
1,110,000
428,000
969,000
724,000
632,000
1,189,096
1,250,000
2,800,000
672,000
790,000
1,535,000
906,000
1,780,000
830,000
351,000
396,000
693,000
545,000
30,407,696
163,792,696

1.3
81.4
0.4
0.4
0.9
0.2
0.2
0.3
0.2
0.4
0.4
0.3
0.2
0.2
0.3
0.4
2.1
0.9
0.7
0.3
0.6
0.4
0.4
0.7
0.8
1.7
0.4
0.5
0.9
0.6
1.1
0.5
0.2
0.2
0.4
0.3
18.6
100.0

2,477.11
186,962.79
1,861.56
1,967.54
2,990.68
1,518.58
1,155.60
1,850.20
1,148.72
1,851.39
2,114.53
1,494.36
1,007.30
911.07
1,773.90
2,439.90
15,552.59
5,094.29
3,411.24
1,380.21
4,251.91
1,571.04
1,391.02
2,502.11
3,541.43
7,543.10
1,189.12
1,392.00
2,151.67
2,373.10
3,909.90
2,176.23
897.84
1,222.34
1,854.13
1,740.70
85,402.20
272,364.99

98
6,605
60
64
112
33
36
53
36
60
54
36
42
27
36
58
311
114
60
43
65
46
58
104
101
250
48
57
79
80
82
67
34
39
65
48
2,334
8,939

98.4
97.0
100.0
100.0
93.9
97.5
93.6
100.0
100.0
95.0
98.4
89.7
97.6
96.3
91.6
95.7
97.6
97.0
97.3
100.0
98.2
96.2
100.0
97.1
90.6
96.7
89.5
93.1
85.9
94.7
84.7
97.3
91.7
91.7
94.3
96.1
95.6
96.6

1－5－
-4-

Leasable Floor Area
Leasable Units(sqm)(units)813.5240
1,108.91
55
1,886.50
77991.6249
1,095.91
53
905.8145
1,437.84
68
1,884.62
78
872.4935
1,742.64
68
876.7022
4,141.56
77
5,999.80
98
2,961.0680
1,604.72
43
2,610.05
91
3,692.44
56
1,706.46
80
1,708.1964952.0650437.9427
1,264.84
60
1,151.36
52
1,244.00
58
778.1937927.3346
1,766.47
77

Occupancy Rate
(May 2015)(%)
100.0
100.0
97.4
100.0
98.1
97.8
92.6
100.0
94.3
98.3
95.4
97.7
95.9
100.0
93.1
96.6
96.8
98.0
100.0
98.3
100.0
98.3
100.0
100.0
97.3
100.0
98.7

Profile of the Asset Management Company
As of October 1, 2011, Nomura Real Estate Asset Management Co., Ltd. (NREAM) was merged with Nomura Real Estate
Investment Management Co., Ltd. (NREIM) and Nomura Real Estate Capital Management Co., Ltd. (NRECM), with a change of its
Japanese trade name from Nomura Fudosan Toshin to Nomura Fudosan Toshi Komon. We believe that the Company can benefit
from various synergy effects from this merger including the ability to quickly respond to changes in the real estate and financial
markets, the enhancement of expertise and experience necessary for real estate investment, and the ability to provide asset
management services through one of the largest real estate asset management companies in Japan.

Company: Nomura Real Estate Asset Management Co., Ltd.
Capital: ¥300 million (as of May 31, 2015)
Shareholder : Nomura Real Estate Holdings, Inc. (100%)
Incorporation : January 24, 2003

Statutory Auditors

Corporate Planning
Legal & ComplianceInternal Audit
Accounting
Discretionary Investment Management Section

Investment Performance Analysis Section

President & CEO

Board of Directors

General Meeting of Shareholders

Board of Statutory Auditors

・Organization of the asset management company

Finance
Client Relations & Marketing
Investment Management

Research & Analysis Section

Chief Strategy Officer

Project Screening Committee

NPR Valuation Committee

Risk Management Committee

Compliance Committee

Investment Committee

Product Management
Acquisitions
Investment Management Planning
NOF Investment Management
NRF Investment Management
NMF Investment Management
NPR Investment Management

・Profile of General Manager , NRF Investment Management

Tetsuya Ohira
Apr. 1989
Jul. 1989
Dec. 1992
Jun. 2003
Apr. 2004
Apr. 2007
Apr. 2011
Oct. 2014

Entered Nomura Real Estate Development Co., Ltd.
Yokohama Business Park Department
Osaka Office
Residential Sales Section, Residential Sales Department, Residential Company
Development Section, Second Business Development Department, Residential Company
Development Section, Investment Development Department, Residential Company
Development Manager, Investment Development Department, Residential Company
Executive Officer, Head of NRF Investment Management Department

1－6－
-5-

Performance Report

Contents
Asset Management Report
Profile of the Company
Status of Investment Assets of the Company
Capital Expenditures
Expenses and Liabilities
Trading during the 17th fiscal period
Other Information

7
15
17
27
28
32
36

-6-

Asset Management Report
1. CHANGES IN KEY INDICATORS
17th Period
from Dec. 1, 2014
to May 31, 2015

16th Period
from Jun. 1, 2014
to Nov. 30, 2014

15th Period
from Dec. 1, 2013
to May 31, 2014

14th Period
from Jun. 1, 2013
to Nov. 30, 2013

13th Period
from Dec. 1, 2012
to May 31, 2013

Operating Revenues(¥mln)

5,678

5,480

5,594

5,406

5,257

of which Real Estate Rental Revenues(¥mln)

5,659

5,427

5,556

5,356

5,238

Operating Expenses(¥mln)

3,253

3,057

3,080

2,848

2,823

of which Real Estate Rental Expenses(¥mln)

2,543

2,353

2,453

2,250

2,252

Operating Profit(¥mln)

2,424

2,423

2,513

2,558

2,433

Ordinary Income(¥mln)

1,873

1,878

1,956

1,966

1,878

Net Income(¥mln)

1,872

1,877

1,955

1,965

1,876

Total Assets(¥mln)

169,316

164,852

167,940

168,019

156,576(Changes from Previous Period)(%)（＋2.7）（-1.8）（-0.0）（＋7.3）（-0.1）

Interest-Bearing Debts(¥mln)

91,13086,82089,75089,84083,002

Net Assets(¥mln)

75,15575,14875,22675,236

70,838(Changes from Previous Period)(%)（＋0.0）（-0.1）（-0.0）（＋6.2）（＋0.0）

Unitholders’ Capital(¥mln)

73,231

73,231

73,231

73,231

68,961

Number of Units Issued(Units)160,800

160,800

160,800

160,800

150,936

Net Assets per Unit(¥)

467,382

467,340

467,827

467,887

469,326

Total Cash Distribution(¥mln)

1,872

1,865

1,955

1,965

1,836

Cash Distribution per Unit(¥)

11,642

11,60012,161

12,221

12,170of which Cash Distribution of Profits(¥)

11,642

11,60012,161

12,221

12,170of which Cash Distribution in excess of Profits

(¥)

－

－

－

－

－

ROA (Return on Assets) (Note 1)

(%)

1.1

1.1

1.2

1.2

1.2

Annualized ROA (Note 2)

(%)

2.2

2.3

2.3

2.4

2.4

ROE (Return on Equity) (Note 3)

(%)

2.5

2.5

2.6

2.7

2.6

Annualized ROE (Note 2)

(%)

5.0

5.0

5.2

5.4

5.3

Capital Adequacy Ratio (Note 4)

(%)

44.4

45.6

44.8

44.8

45.2

(%)

（-1.2）（＋0.8）（＋0.0）（-0.5）（＋0.0）LTV (Loan-to-Value) (Note 5)

(%)

53.8

52.7

53.4

53.5

53.0

Number of Operating Days

(days)

182

183

182

183

182

Payout Ratio (Note 6)

(%)

100.0

99.3

99.9

100.0

97.8

Number of Properties Held(bldgs)

148

150

153

155

152

Total Leasable Floor Space(㎡)

276,194.09

272,627.52

274,346.62

277,166.54

262,961.11(Changes from Previous Period)

Number of Tenants(tenants)

148

150

153

155

152

Occupancy Rate

(%)

96.6

96.2

95.8

96.2

96.4

Depreciation(¥mln)

1,072

1,052

1,053

1,012

967

Capital Expenditures(¥mln)

76

136

95

94

138

NOI (Net Operating Income) (Note 7)(¥mln)

4,187

4,126

4,156

4,118

3,953

FFO (Funds from Operation) (Note 8)(¥mln)

2,948

2,929

2,979

2,934

2,833

FFO per Unit (Note 9)(¥)

18,336

18,21818,52818,251

18,773Note 1: “ROA (Return on Assets)” = Ordinary Income / {(Total Assets at the beginning of the period + Total Assets at the end of the period) / 2} x 100
As for 14th period, the Total Assets were time-adjusted due to the additional issuance of investment units.
Note 2: “ROA” and “ROE” are annualized using the following number of operating days.13th Period: 182 days, 14th Period: 183 days, 15th Period: 182 days, 16 th Period: 183 days
and 17th Period: 182 days.
Note 3: “ROE (Return on Equity)” = Net Income / {(Net Assets at the beginning of the period + Net Assets at the end of the period) / 2} x 100
As for 14th period, Net Assets were time-adjusted due to the additional issuance of investment units.
Note 4: “Capital Adequacy Ratio” = Net Assets / Total Assets x 100
Note 5: “LTV (Loan-to-Value)” = Interest-Bearing Debts / Total Assets x 100
Note 6: Rounded off to the first decimal place.
Note 7: “NOI (Net Operating Income)” = Real Estate Rental Revenues – Real Estate Rental Expenses + Depreciation
Note 8: “FFO (Funds from Operation) = Net Income + Depreciation + Amortization of Investment Corporation Bonds Issuance Costs – Real Estate Sale Profit/Loss
Note 9: “FFO per Unit” = FFO / Number of Units Issued-7-2. OUTLINE OF INVESTMENTS IN THE 15TH FISCAL PERIOD
Nomura Real Estate Residential Fund was incorporated on August 3, 2006 under the Act on Investment Trusts andInvestment Corporations of Japan, and listed Investment Securities that represent the units of investment equity of theCompany in the Real Estate Investment Trust (REIT) Market of the Tokyo Stock Exchange (TSE) on February 14, 2007
(TSE code: 3240).
The Company’s basic investment policy is to assure stable income and steady portfolio asset growth over the
medium-to-long-term through investment in specified assets such as properties and property-related securities.
We invest in properties with a focus on residential use in accordance with the Company’s basic policy (securities
specified for residential properties). In addition, in order to realize stable income over the medium-to-long term, we carryout expeditious asset management according to property characteristics and market conditions (medium-to-long term
stable management).
Note:
The Law Concerning Investment Trusts and Investment Corporations of Japan (Law No. 198 of 1951) is referred to as the "Investment Trust Law" hereinafter.
The Tokyo Stock Exchange is referred to hereinafter as the “TSE”.
The units of investment equity means the units of investment equity of the Company.
The term “property (ies)” refers to those assets defined in Section 29, Paragraph 1, Article (1) and (2), and “property-backed securities” refers to those assets defined in Section
29, Paragraph 1, Article (3) respectively of the Articles of Incorporation of the Company.
The terms “property (ies)” and “property-backed securities” are collectively referred to as “property-related assets” hereinafter.
The properties and underlying properties of the property-related assets are collectively referred to as the “investment properties”.
The term “investment assets” refers to those assets that belong to the Company.

(1) Market Environments and fund performance
The Japanese economy during the fiscal period experienced an ongoing gradual recovery given the bottoming out ofdomestic demand which had been sluggish since the consumption tax hike in April 2014. Furthermore, corporate
performance is seen to be improving and capital investment increasing boosted by the postponement of further increase of
consumption tax and decrease of commodity prices due to low oil prices in addition to the advancing yen depreciation andhigh stock prices resulting from the effects of additional monetary easing measures by the Bank of Japan. According to the
Bank of Japan’s March 2015 Short-Term Economic Survey of Enterprises in Japan (Tankan), the business conditions DI
for all enterprises and all industries improved 1 point from the previous survey. Regarding the future of the economy, therecovery trend is thought to continue as steady improvements are seen in the employment and income environments andunderlying support from private consumption is expected.
Under such circumstances, new J-REITs are being listed (IPOs) and existing REITs are actively acquiring properties
through public offerings, backed by hopes for improvements in real estate rental revenues and as well as the excellent
fund procurement environment due to monetary easing.
In the rental housing market as well, J-REIT-owned rental housing continues to maintain high occupancy rate and therecovery trend can be seen such as with properties at which the rent level is rising. In the backdrop are the continuing
inflow of population to the Greater Tokyo Area (Tokyo, Kanagawa, Chiba and Saitama prefectures) and major regional
cities which are the main areas of investment for J-REITs as well as the continued stable demand from single and small
households due in part to such factors as the trend for later marriage and declining birth rates. Furthermore, in terms ofsupply, rental housing construction starts is lower than the peak in 2006, implying that the balance of supply and demand
for rental housing will remain favorable for some time.
On the other hand, in the real estate transaction market competition over acquisitions is overheated due in part to anincrease in participants. Furthermore, the supply of rental housing is still limited, which has created a severe environment
for the acquisition of properties.
In the management environment described above, the Company made the following management achievements in the
17th fiscal period (ended May 2015).

-8-

(a) Asset Acquisition and Disposition.
The Company has fully utilized the strong sourcing routes of each property brand listed in the table below, andhas continued acquisition activities.
Brand

Acquisition Strategy

PROUD FLAT

Strategic Cooperation with Nomura Real Estate Development

Properties planned/developmentby Nomura Real Estate Development（Note:1）

The strategic cooperation with Nomura Real Estate Development enables
the Fund to undertake the development and acquisition of PROUD FLAT,a residential property brand, which utilizes residential property related
know-how for land acquisition, product planning, management, etc. This
plays the pivotal role of the Fund’s growth strategy and the Fund will
utilize it to the full extent.

PRIME URBAN
Utilization of Networks with Providers Utilizationof Nomura Real Estate Group Information Networks

Properties planned/developed by companies
other than Nomura Real Estate
Development

Proactively utilizing the network with providers built through the
management of private funds which extends over 5 years and the Fund’s
management which extends over 8 years. By utilizing the expansive
brokerage network held by Nomura Real Estate Group, pursuit ofcollecting adequate information on properties for selling will be fulfilled.

（Note:2）(Note) Hereinafter, Nomura Real Estate Development refers to Nomura Real Estate Development Co., Ltd. Nomura Real Estate Group refers to a corporate group consistingof the consolidated subsidiaries of Nomura Real Estate Holdings, Inc. including Nomura Real Estate Development but excluding Nomura Real Estate AssetManagement Co., Ltd., to which the Company assigns asset management-related operations.

As in previous fiscal periods, the Company continued to implement its strategy for property replacement in the
17th fiscal period to enhance portfolio profitability and quality. Three properties (PRIME URBAN Naka Meguro II,
PRIME URBAN Nagahara Kamiikedai and PRIME URBAN Nishi Ogikubo II) totaling 6,300 million yen (sum totalof acquisition prices) were acquired during the period while five properties (PRIME URBAN Roka Koen, PRIMEURBAN Karasuyama, PRIME URBAN Oimachi, PRIME URBAN Hino and PRIME URBAN Minami Gyotoku III)
totaling approx. 1,827 million yen (sum total of transfer prices) were transferred during the period.
As a result of the above, assets at the end of the 17th fiscal period (as of May 31, 2015) totaled 148 properties
amounting to approx. 163,792 million yen (sum total of acquisition prices).
As indicated in “3. Important Events Subsequent to the 17th Fiscal Period,” two properties (PRIME URBAN
Naka Ochiai and PRIME URBAN Kamiuma) totaling approx. 1,613 million yen (sum total of transfer prices) weretransferred after the 17th fiscal period.
(b) Property Management
In terms of portfolio property management, even as the period contained the year end in which there are manytenant replacements, the Company enhanced advertising activities and actively utilized model rooms of properties tolease up the three properties newly acquired in December 2014 and to maintain the high occupancy rate of existing
portfolio properties.
In leasing, the Company worked to maintain and enhance property competitiveness through renovations as well
as by raising unit rents through a flexible review of advertised terms and conditions in light of the status of respective
properties. In addition, the Company endeavored, as it has in previous fiscal periods, to shorten vacancy through more
effective control of the time required to restore units to their original state. These and other efforts allowed theCompany to post a portfolio occupancy rate of 96.6% at the end of the 17th fiscal period, an occupancy rate consistent
with the high rate that we have maintained since the previous period.
The Company is continuing its efforts to maintain and improve occupancy rates, rent levels and tenantsatisfaction by meeting market needs.

-9-(c) Status of Funding
In order to assure stable income and the steady growth of portfolio assets over the medium- to long-term, theCompany continued the conservative financial strategies described below in the 17th fiscal period.
Regarding the refinancing of 7,700 million yen in existing loans, three long-term loans were refinanced with
fixed interest rates (including fixation through interest rate swap transactions). Financial stability was enhanced andthe risk of rising interest rates was addressed through the promotion of long-term interest-bearing debt and fixedinterest rates.
As a result, the ratio of long-term debt is 78.5%, the ratio of fixed interest debt (including fixation throughinterest rate swap transactions) is 93.9%, the average maturity of the outstanding interest-bearing debt is 3.14 years(the average maturity of the outstanding long-term interest-bearing debt is 3.88 years). In the end, the rate ofinterest-bearing debt in the total assets, which is the loan-to-value (LTV) ratio, becomes 53.8%.
Furthermore, while 4,400 million yen was borrowed in December 2014 for the acquisition of the three newproperties, the borrowing was partially repaid before schedule after the end of the 17th fiscal period such as with cashon hand from the transferred properties mentioned above.
The table below shows the credit ratings of the Company as of the end of the 17th fiscal period. Moreover,Japan Credit Rating Agency, Ltd. and Standard and Poor’s Ratings Services have released press releases dated May 27,
2015 regarding the credit rating of the Company for the reason that the Company concluded a merger agreement as of
May 27, 2015 as stated below in “(e) Merger with Nomura Real Estate Master Fund, Inc. and Nomura Real Estate
Office Fund, Inc.”
Rating Company
Japan Credit Rating Agency, Ltd

Standard & Poor’s Ratings Services.

RatingOutlookLong-term Senior Debt Rating：AA

Rating outlook: (Note 1)

Long-term corporate credit rating：A

Outlook: Stable (Note 2)

Short-term Corporate Credit Rating ：A-1－

(Note 1) Designation to credit monitor (direction: negative) was announced in a press release dated May 27, 2015).
(Note 2) Credit rating with continued “stable” outlook was announced in a press release dated May 27, 2015.

(d) Financial Performance and Distributions
As a result of the above-mentioned strategies during the 17th fiscal period, the Company recorded 5,678 million
yen in operating revenue, 2,424 million yen in operating profit, 1,873 million yen in ordinary income and 1,872
million yen in net income.
Concerning the cash distribution, in accordance with Article 67-15 of the Act on Special Measures Concerning
Taxation (Act No. 26 of 1957), the Company decided to distribute almost the entire amount of distributable profit. As aresult, the amount of cash distribution per unit for this fiscal period was 11,642 yen.
(e) Merger with Nomura Real Estate Master Fund, Inc. and Nomura Real Estate Office Fund, Inc.
The Company, Nomura Real Estate Master Fund, Inc. (“NMF”) and Nomura Real Estate Office Fund, Inc.
(“NOF”) (the Company, NMF and NOF are individually referred to as the “Consolidated Investment Corporation”
hereinafter) respectively have determined at each of the board of directors meeting held on May 27, 2015 to implement
a consolidation-type merger (the “Merger”) whereby October 1, 2015 is set as the date of incorporation of investment
corporation (the “New Investment Corporation”) incorporated through the consolidation-type merger, and have enteredinto a merger agreement as of May 27, 2015.
We hereby announce that such approvals have been obtained at the general meeting of unitholders of NMF andNOF held on July 30, 2015 and NRF held on July 31.
A. Purpose of Merger
The Company, NMF and NOF each entrusts its asset management to the asset management company, is provided
support by the Nomura Real Estate Group and have established stable track records, but have faced changes in thebusiness environment such as intensified acquisition competitions and polarization of size in J-REITs, anddiversification of investment sectors by J-REITs in recent years.
Confronting such change in business environment, the Company, NMF and NOF have respectively considered
measures to maximize sustainable growth of unitholders’ value and share a common view that it is necessary to expand
the asset size, diversify portfolio and strengthen the stability of financing basis in order to strengthen capacity for
future growth. With such mutual recognition, the companies have discussed and considered a merger as measures toenhance unitholders’ value
The Company, NMF and NOF believe that, through becoming with the merger a top-class domestic diversified
type J-REIT with an asset size of more than 900 billion yen, with increased asset size and diversified investment
sectors that will contribute to expand acquisition opportunities, stabilize the portfolio, enhance risk tolerance, gain
competitive strength for asset acquisitions and stabilize the finance basis, in addition to making the best use of the- 10 -

asset management company’s abundant and professional expertise accumulated through management of the Company,
NMF and NOF and effectively leveraging wide-range know-hows and brands held by the Nomura Real Estate Group,
one of the major comprehensive real estate developers in Japan, both growth and stability can be achieved
In particular, the following demonstrates the Company, NMF and NOF’s concept of the Merger:①Pursue sustainable growth by transforming from “Specialized type J-REIT” to “Diversified type J-REIT”②Strengthen stability and enhance growth strategy through benefit of a large-scale REIT
③Accelerate mutual growth with Nomura Real Estate Group by establishing “Leasing Business Value Chain”
After the Merger, the New Investment Corporation, with the above-mentioned concepts of the Merger in mind,
aims to secure stable mid- to long-term income and maximize unitholders’ value through steadily increasing theportfolio size. In addition, it is expected that, as a positive effect of the Merger, market price of investment units could
be more stabilized due to increase in cash distribution through external and internal growth and improved liquidity ofinvestment units.
B. Merger Ratio
With the Merger, 4.45 New Investment Corporation units will be allotted to the Company’s unitholders per one
unit of the Company, 1 New Investment Corporation unit will be allotted to NMF unitholders per one NMF unit and3.60 New Investment Corporation units will be allotted to NOF unitholders per one NOF unit. As there will therefore
be a fraction of one investment unit attributed to the Company’s and NOF’s unitholders, pursuant to the relevant laws,
such fractions will be disposed of through market transactions and the proceeds from the unit sales will be distributed
to the unitholders in proportion to the total number of fractions of investment units each unitholder has.
C. Cash Distribution on Merger
Instead of cash distributions for each Consolidated Investment Corporation’s final fiscal period ending on
September 30, 2015 (in the case of the Company, the period from June 1, 2015 to September 30, 2015; in the case of
NMF; the period from September 1, 2015 to September 30, 2015; in the case of NOF, the period from May 1, 2015 to
September 30, 2015), the New Investment Corporation will make a cash distribution on merger to the unitholders
listed or recorded on the final unitholders register of each of the Consolidated Investment Corporations as of the day
immediately prior to the date of incorporation of the New Investment Corporation (excluding each Consolidated
Investment Corporation and the dissenting unitholders of each Consolidated Investment Corporation who demand for
repurchase of investment units pursuant to Article 149- 3 of the Investment Trust Act) (the “Allotted Investors”), in an
amount equivalent to the cash distributions for the final fiscal period based on each Consolidated Investment
Corporation’s distributable profit (the payment on merger will be (i) the amount of distributable profit of each
Consolidated Investment Corporation as of the day immediately prior to the date of incorporation of the New
Investment Corporation divided by (ii) the number of investment units that is obtained by deducting (a) the number ofinvestment units held by the unitholders other than the Allotted Investors of each Consolidated Investment Corporationfrom (b) the number of investment units issued and outstanding of each of such Consolidated Investment Corporation,
as of the day immediately prior to the date of incorporation of the New Investment Corporation (amounts less than one
yen are rounded down)). The details will be announced once they are determined
Concerning the distribution of NMF for the fiscal period ending on August 31, 2015 (the period from March 1,
2015 to August 31, 2015), the distribution is scheduled to be made to the untiholders and the registered pledgees ofinvestment units listed or recorded on the final unitholders register of NMF as of August 31, 2015, after the approvalon the statements for such cash distribution for the fiscal period that is scheduled to be obtained at NMF by the date ofincorporation of the New Investment Corporation. The payment of such distribution will be made after theincorporation of the New Investment Corporation through the Merger.

- 11 -

3. STATUS OF CAPITAL
Changes in the number of units issued and unitholders’ Capital until the end of the 17th fiscal period (as of May 31,2015) are as follows:
Date

Number of Units Issued (Unit)
ChangeBalance
400

Type of Issue

Unitholders’ Capital (¥ mln)
ChangeBalance240Aug. 3, 2006

Initial private placement (Note 1)

Sep. 26, 2006

Private Offering (Note 2)

17,93018,330400

10,758

10,998240

Feb.13 , 2007
Mar.13, 2007

Public offering (Note 3)
Third-party allotment (Note 4)

47,4002,370

65,73068,10028,816
1,440

39,814
41,255

Feb.13, 2008
Mar.11, 2008

Public offering (Note 5)
Third-party allotment (Note 6)

27,3001,365

95,40096,765

11,918595

53,17353,769Dec. 7, 2009
Dec.24, 2009

Public offering (Note 7)
Third-party allotment (Note 8)

27,4001,370

124,165
125,535

7,647
382

61,417
61,799Dec. 1, 2011

Public offering (Note 9)23,629149,164

6,662

68,461

Dec.20, 2011
Aug.26, 2013

Third-party allotment (Note 10)
Public offering (Note 11)

1,772
9,306

150,936
160,242

499
4,028

68,961
72,989Sep.25, 2013

Third-party allotment (Note 12)558
160,800
241
73,231
Note1: Investment units were issued at issue price of 600,000 yen per unit upon establishment of the Fund.
Note2: Additional investment units were issued at the price of 600,000 yen per unit for the purpose of financing acquisition of new properties, etc. Asset management commenced.
Note3: Additional investment units were issued at 630,000 yen per unit (subscription price: 607,950 yen) in a public offering, for the purpose of financing acquisition of new
properties and repayment of debt.
Note4: In conjunction with the public offering on February 13, 2007, investment units were allocated to Nomura Securities Co., Ltd., at 607,950 yen per unit issue price.
Note5: Additional investment units were issued at 451,780 yen per unit (subscription price: 436,567 yen) in a public offering, for the purpose of financing repayment of debt.
Note6: In conjunction with the public offering on February 13, 2008, investment units were allocated to Nomura Securities Co., Ltd., at 436,567 yen per unit issue price.
Note7: Additional investment units were issued at 289,545 yen per unit (subscription price: 279,097 yen) in a public offering, for the purpose of financing acquisition of new
properties and repayment of debt.
Note8: In conjunction with the public offering on December 7, 2009, investment units were allocated to Nomura Securities Co., Ltd., at 279,097 yen per unit issue price.
Note9: Additional investment units were issued at 292,193 yen per unit (subscription price: 281,951 yen) in a public offering, for the purpose of financing acquisition of new
properties.
Note10: In conjunction with the public offering on December 1, 2011, investment units were allocated to Nomura Securities Co., Ltd., at 281,951 yen per unit issue price.
Note11: Additional investment units were issued at 448,500 yen per unit (subscription price: 432,860 yen) in a public offering, for the purpose of financing acquisition of new
properties.
Note12: In conjunction with the public offering on August 26, 2013, investment units were allocated to Nomura Securities Co., Ltd., at 432,860 yen per unit issue price.

[Changes in Price at the Tokyo Stock Exchange]
Changes in prices of the Company’s investment units listed on the Tokyo Stock Exchange are as follows.

High

(¥)

17th Period
from Dec. 1, 2014
to May 31, 2015
740,000

Low(¥)

642,000

16th Period
from Jun. 1, 2014
to Nov. 30, 2014
672,000

15th Period
from Dec. 1, 2013
to May 31, 2014
581,000

14th Period
from Jun. 1, 2013
to Nov. 30, 2013
572,000

13th Period
from Dec. 1, 2012
to May 31, 2013
670,000

535,000

504,000

439,000

439,000

4. CASH DISTRIBUTION
In order to qualify for special tax treatment under Article 67-15-1 of the Act on Special Measures Concerning Taxation to havemaximum cash distribution amount treated as deductible dividends, the Company distributed the entire unappropriated retained
earnings except for fractional amounts smaller than one yen per each investment unit. As a result, the amount of cash distribution
per unit for this fiscal period was ¥11,642.

Retained Earnings(¥000)

Accumulated earnings(¥000)

Total cash distribution(¥000)(Cash distribution per unit)of which distribution of profits(¥)(¥000)(Distribution of profits per unit)of which refund of capital(¥)(¥000)(Refund of capital per unit)(¥)

17th Period
from Dec. 1, 2014
to May 31, 2015
1,872,053
20

16th Period
from Jun. 1, 2014
to Nov. 30, 2014
1,877,325
12,04598

64

40,067

1,872,033(11,642)

1,865,280

1,955,488

1,965,136

1,836,891(11,600)
1,865,280(12,161)
1,955,488(12,221)1,965,136(12,170)
1,836,891-(11,600)-(12,161)-(12,221)-(12,170)
-

(-)

(-)

(-)

(-)

(-)

1,872,033(11,642)- 12 -

15th Period
from Dec. 1, 2013
to May 31, 2014
1,955,587

14th Period
from Jun. 1, 2013
to Nov. 30, 2013
1,965,201

13th Period
from Dec. 1, 2012
to May 31, 2013
1,876,958

5. INVESTMENT POLICY AND FUTURE ISSUESAs described earlier in “2. OUTLINE OF INVESTMENTS IN THE 17TH FISCAL PERIOD,” the Japanese economy
is indicating trends of a gradual economic recovery amidst progressive improvements in the employment and income
environments. In addition, investment capital is flowing into the J-REIT market and the environment for fundprocurement is excellent.
In such a business environment, the Company will aim to secure stable revenues and steady growth of portfolio assets
over the medium to long term by conducting management that makes the most of the Company’s strengths. Furthermore,in the case that the Merger is established, we will aim to secure stable mid- to long-term income and maximize
unitholders’ value through increasing the portfolio size by maximally exhibiting the asset management company’sabundant expert know-how that has been nurtured such as through the management of each Consolidated Investment
Corporation while effectively utilizing the Nomura Real Estate Group’s wide-ranging know-how, in addition to expanding
opportunities for property acquisitions, increasing the portfolio’s stability and risk tolerance, strengthening thecompetitiveness for property acquisitions and stabilizing finances with the backdrop of an increased asset size anddiversified investment sectors.
(a) Property Acquisition
The Company will continue striving to make selective investments by utilizing its strong sourcing channels to obtain
information on prime properties at an early stage, while taking into consideration the financial composition. By
doing so, the Company intends to promote the building of a portfolio that generates stable revenues over the medium
to long term, as it works to further diversify the portfolio while keeping its portfolio assets well-balanced in terms ofbuilding age, etc.
(b) Property Replacement
The Company will continue to implement property replacement in the portfolio for the purpose of enhancing
portfolio quality as well as stabilizing and increasing revenues over the medium to long term. Upon conducting
replacement, the Company will use the funds obtained from selling properties in the portfolio to acquire newproperties so that it can maintain its conservative financial strategy.
(c) Property Management
The Company will continue working to maintain and enhance revenues by promoting property management in an
integrated manner with the PM companies and establishing appropriate leasing strategies for each property, while
endeavoring to reduce costs at its investment properties as much as possible. By doing so, the Company aims tomaximize performance of the portfolio.
The Company will work to maintain and enhance the competitiveness and profitability of its investment properties
by considering and implementing various measures for enhancing the occupancy rates and cash flows throughgrasping the characteristics of each investment property and analyzing market needs, among other things, as well as
by implementing large-scale repairs and remodeling works in a timely and appropriate manner.
(d) Fund Procurement
The Company will continue to establish an appropriate financial base by properly controlling the risk of interest rate
fluctuations through fixing interest rates and lengthening loan periods, as well as distributing repayment dates,
diversifying lending institutions and fund procurement means, and procuring funds in unsecured and unguaranteedloans. In addition, the Company will continue to pursue a well-balanced composition of its interest-bearing debt byconsidering and selecting the optimum fund procurement means from among a range of options, while closely
monitoring financial market trends.

6. IMPORTANT EVENTS SUBSEQUENT TO THE 17TH FISCAL PERIOD
A. Transfer of Assets
The Company transferred the following assets after the end of the 17th fiscal period (end of May 2015).
Name of property

LocationTransfer priceBook value(thousands of(thousands of yen)
yen)

PRIME URBAN Naka Ochiai

Shinjuku, Tokyo

708,339

651,555

PRIME URBAN Kamiuma

Setagaya, Tokyo

905,000

897,645

Date of transfer

June 1, 2015
(Note) The book value is as recorded in the balance sheet as of the end of the 17th fiscal period (end of May 2015).

- 13 -

(Reference)
A. Acquisition of Assets
The Company concluded a purchase agreement dated May 27, 2015 for the acquisition of the following properties on
condition of the establishment of the Merger.
Type of specified
assetReal estate

Real estate

Name of property

PROUD FLAT Hatchobori

PROUD FLAT Itabashi Honcho

Location (Note 1)(Registry) 1-107-7 Hatchobori, Chuo-ku, Tokyo(Street address) 1-8-5 Hatchobori, Chuo-ku,
Tokyo(Registry) 32-46 Honcho, Itabashi-ku, Tokyo(Street address) 32-9 Honcho, Itabashi-ku,
Tokyo

Structure (Note 1)

RC 12FRC 10F

Site area (Note 1)

179.90 m2 (54.41 tsubo)

326.02 m2 (98.62 tsubo)

Gross floor area
(Note 1)

1,163.30 m2 (351.89 tsubo)

1,401.32 m2 (423.89 tsubo)

Type ofownership(Land) Ownership(Building) Ownership(Land) Ownership(Building) Ownership

May 27, 2014

July 8, 2014

920 million yen

720 million yen

Contract date

May 27, 2015 (Execution of the property saleand purchase agreement)

May 27, 2015 (Execution of the property saleand purchase agreement)

Scheduledacquisition date

October 30, 2015 (Delivery of the property

October 30, 2015 (Delivery of the property)

Seller

Nomura Real Estate Development Co., Ltd.

Nomura Real Estate Development Co., Ltd.

Acquisition funds

Scheduled to finance from borrowings in New
Investment Corporation

Scheduled to finance from borrowings in New
Investment Corporation

Completed (Note1)
Scheduledacquisition price(Note 2)

(Note 1) The “location” (excluding street address (jukyo hyoji)), “structure,” “site area,” “gross floor area” and “completion date” are based on theinformation in the real estate registry.
(Note 2) The “scheduled acquisition price” indicates an amount that does not include various other expenses necessary for the acquisition of the relevant
property, such as taxes and public dues (i.e., the amount of the acquisition price of the property set forth in the property sale and purchaseagreement).

B. Early Repayments of Existing Loans
The company executed early repayments of the following loans amounting to 3,300 million yen as of June 17, 2015.
Lenders: The Bank of Tokyo Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation,
Mizuho Bank, Ltd., Mitsubishi UFJ Trust and Banking Corporation, Sumitomo Mitsui
Trust Bank, Limited

Loan balance: 3,300 million yen

Applied interest rate

: 0.51000% (annual rate)(May 27, 2015 to June 26, 2015)

Date of execution: December 18, 2014

Repayment date

: November 26, 2017
(However, if the date is not a business day then the following business day, or if thatday is the following month then the previous business day)- 14 -

Profile of the Company
1. STATUS OF UNITHOLDERS’ CAPITAL
17th Period(as of May 31, 2015)

16th Period(as of Nov. 30, 2014)

15th Period(as of May 31, 2014)

14th Period(as of Nov. 30, 2013)

13th Period(as of May 31, 2013)(Unit)

2,000,000

2,000,000

2,000,000

2,000,000

2,000,000

Number of units issued(Unit)

160,800

160,800

160,800

160,800

150,936

Amount of unitholders’ capital(¥ mln)73,231

73,231

73,231

73,231

68,961

9,070

10,003

10,595

11,13910,720Maximum number
allowed to issue

of

units

Number of unitholders

2. MATTERS CONCERNING THE INVESTMENT UNITS
The 10 largest unitholders as of May 31, 2015 were as follows.
Name

Number of Units Held (Unit)

Portion in the Total Units Issued (%)

Japan Trustee Services Bank, Ltd. （Trust Account）

46,30628.80

Nomura Real Estate Development Co., Ltd.

15,240

9.48

The Master Trust Bank of Japan, Ltd. （Trust Account）

7,308

4.54

Trust and Custody Services Bank, Ltd. (Securities Investment Trust Account)

5,792

3.60

The Nomura Trust and Banking Co., Ltd. （Investment Account）

4,952

3.08

The Fuji Fire and Marine Insurance Co., Ltd.
(Standing Proxy: Japan Trustee Services Bank, Ltd.)

3,212

2.00

Trust and Custody Services Bank, Ltd. （Money Trust Tax Account）

3,010

1.87

The Joyo Bank, Ltd.
(Standing Proxy: The Master Trust Bank of Japan, Ltd.)

2,502

1.56

The Ashikaga Bank, Ltd.

1,984

1.23

The Fukui Bank,Ltd.
(Standing Proxy: Trust and Custody Services Bank, Ltd.)

1,908

1.19

92,214

57.35

Total

3. BREAKDOWN OF UNITHOLDERS
The breakdown of unitholders as of May 31, 2015 was as follows.
Number ofUnitholders
Private and other investors

Number of Units
per Unitholder

Portion (%)

Portion (%)

8,673

95.6

24,15415.0

Financial institutions(Including sales agents for financial instruments firm)

105

1.2

105,358

65.5

Other domestic corporate investors

160

1.8

21,147

13.2

Foreign corporate investors, etc.

132

1.5

10,141

6.3

Total

9,070

100.0

160,800

100.0- 15 -

4. DIRECTORS AND AUDITOR(1) Name of directors and an auditor in the 17th fiscal period are as follows (Note 1)
Title

Name

Total Amount of Fees Paid
during the 17th Period(¥000)

Other Major Title(s)Executive Director

Shozo Matsumura (Note2)

Auditor, Nomura Real Estate Partners Co., Ltd.
Auditor, Nomura Amenityservice Co., Ltd.
Auditor, Yokohama Business Park Heating and Cooling Supply Co., Ltd.

2,400

Supervisory Director

Eitoku Aikawa

Director, Japan Association of Real Estate Counselors

2,400Supervisory Director

Motoharu Yokose

Advisor, Asahi Tax Corporation.
Auditor, YAMATO HOLDINGS CO., LTD.

2,400

Accounting Auditor

Ernst & Young ShinNihon LLC––

11,200Note 1: No Executive Directors or Supervisory Directors are in possession of the Company’s investment units either under their own or another person’s name. Other companies atwhich Supervisory Directors serve as directors have no mutual business interests whatsoever with the Company.
Note 2: After the end of the 17th fiscal period (May 31, 2015), Executive Director Shozo Matsumura has resigned as auditor of Nomura Amenity Service Co., Ltd. as of June 19,2015 and resigned as auditor of Nomura Real Estate Partners Co., Ltd. as of June 22, 2015. In addition, while he was appointed as auditor of the Yokohama Business Park
Heating and Cooling Supply Co., Ltd. on April 1, 2015, resigned from the position as of June 23, 2015 after the end of the 17th fiscal period (May 31, 2015) and was
appointed as auditor of MEGALOS Co., Ltd. on the same day.
Note 3: Saneaki Ichijo has been appointed as substitute Supervisory Director to provide against vacancy of the Supervisory Director’s position or lack of statutory quorum. Mr.
Saneaki Ichijo is Supervisory Director of Nomura Real Estate Office Fund, Inc., which entrusts the asset management company of the Company to provide asset
management services.

(2) Policy on Determining the Dismissal and Denial of Reappointment of Accounting Auditors
In case an item listed under Article 105, Paragraph 1 of the Investment Trust Law becomes applicable to the accounting
auditor, and the Board of Directors determines that there is no likelihood of improvement, the Board of Directors shall dismiss
the accounting auditor by unanimous vote of all board members.
In addition, if the Board of Directors determines that the accounting auditor is inappropriate for the position having
given thorough consideration to its execution of business and other factors, the Board of Directors shall dismiss or denyreappointment of the accounting auditor, and present an agenda for appointment of a new accounting auditor at the General
Unitholders’ Meeting.

5. ASSET MANAGEMENT COMPANY, CUSTODIANS AND ADMINISTRATORSBusiness

Company Name(s)Asset Management Company

Nomura Real Estate Asset Management Co., Ltd.

Custodian of assets

Mitsubishi UFJ Trust and Banking Corporation

Custodian of unitholders’ register

Mitsubishi UFJ Trust and Banking Corporation

Manager of special accounts

Mitsubishi UFJ Trust and Banking Corporation

General Administration (accounting, etc.)

Heiseikaikeisha(“HSK”) Tax Corporation

General Administration(Administrative work for organizational operation)

Mitsubishi UFJ Trust and Banking Corporation

General Administration (Financial agent.)

The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation- 16 -

Status of Investment Assets of the Company
1. COMPOSITION OF ASSETS
Type of Assets

Area
Greater Tokyo Area

Real estate(Note 1)
Real estate in trust(Note 1)

17th Period (as of May 31, 2015)
Total AmountPortion(¥ mln) (Note 3)(%) (Note 4)
117,847

69.6

16th Period (as of Nov. 30, 2014)
Total AmountPortion(¥ mln) (Note 3)(%) (Note 4)
106,576

64.6

Other

27,62716.3

27,907

16.9

Greater Tokyo Area

12,361

7.3

19,528

11.8

Other

1,998

1.2

2,014

1.2

159,83494.4

156,026

94.6

SubtotalCash, deposits and other assets

9,481

5.6

8,825

5.4

Grand Total

169,316100.0

164,852100.0

Note 1: Primary use is apartment building.
Note 2: “Greater Tokyo Area” refers to the metropolis of Tokyo and the three surrounding prefectures, Kanagawa, Chiba and Saitama.
“Other Areas” refer to the three major metropolitan areas, excluding Tokyo, and other major cities throughout Japan, including government designated cities. The same shallapply hereinafter.
Note 3: Total amount is taken from the balance sheet. (Real Estate and Real Estate in Trust represent the total book value after depreciation.)
Note 4: The percentage figures may not necessarily add up to 100 due to rounding to the nearest first decimal place.

2. BRIEF OF MAJOR PROPERTIES OWNED
The major component assets of the Company (the 10 largest properties by book value) as of the end of the 17th fiscal period
are as follows.
Name of Property

Book Value(¥ mln)Leasable Floor
Space (m2)

Leased Space(m2)

Occupancy Rate(%)

Portion of Rental
Revenues (%)

Primary Use

PRIME URBAN Meguro Ohashi Hills

3,564

2,955.74

2,805.22

94.9

1.5

Apartment building

PRIME URBAN Sapporo Riverfront

3,505

15,552.59

15,183.55

97.6

3.3

Apartment building

PRIME URBAN Nihonbashi Yokoyamacho

3,431

5,926.17

5,650.73

95.4

2.3

Apartment building

PRIME URBAN Ikebukuro

3,375

4,376.95

4,272.36

97.6

1.9

Apartment building

PROUD FLAT Shirokane Takanawa

3,362

2,950.11

2,924.95

99.1

1.7

Apartment building

PRIME URBAN Nakameguro II

2,885

2,393.45

2,393.45

100.0

1.2

Apartment building

PROUD FLAT Kamata II

2,862

4,051.72

3,945.88

97.4

1.9

Apartment building

PRIME URBAN Izumi

2,843

7,543.10

7,293.80

96.7

2.3

Apartment building

PRIME URBAN Kagurazaka

2,692

2,853.82

2,794.73

97.9

1.4

Apartment building

PROUD FLAT Kamiooka

2,514

4,872.17

4,872.17

100.0

1.5

Apartment building

Total

31,03953,475.82

52,136.84

97.5

19.0

- 17 -

3. DETAILS OF PORTFOLIO PROPERTIES

AreaGreaterTokyo
Area

Location(Postal Address)

Name of Property

Type ofOwnership(Note 1)

Appraisal Valueas of May 31,2015 (¥ mln)
(Note 2)

PROUD FLAT Shirokane Takanawa

5-12-7 Mita, Minato-ku, Tokyo

Real estate

3,400

PROUD FLAT Yoyogi Uehara

3-25-7 Uehara, Shibuya-ku, Tokyo

Beneficial
Interest

989

PROUD FLAT Hatsudai

2-19-15 Hatsudai, Shibuya-ku, Tokyo

Real estate

713

PROUD FLAT Shibuya Sakuragaoka

21-8 Sakuragaoka, Shibuya-ku, Tokyo

Real estate

750

PROUD FLAT Gakugei Daigaku

2-21-20 Meguro Honcho, Meguro-ku, Tokyo

Real estate

746

PROUD FLAT Meguro Gyoninzaka

1-4-18 Shimo Meguro, Meguro-ku, Tokyo

Real estate

939

PROUD FLAT Sumida Riverside

1-31-7 Shinkawa, Chuo-ku, Tokyo

Real estate

2,280

PROUD FLAT Kagurazaka

1-11 Higashi Gokencho, Shinjuku-ku, Tokyo

Real estate

1,590

PROUD FLAT Waseda

521-9 Waseda Tsurumaki-cho, Shinjuku-ku, Tokyo

Real estate

1,110

PROUD FLAT Shinjuku Kawadacho

3-29 Kawadacho, Shinjuku-ku, Tokyo

Real estate

947

PROUD FLAT Sangen Jaya

1-4-25 Taishido, Setagaya-ku, Tokyo

Real estate

1,190

PROUD FLAT Kamata

4-21-4 Kamata, Ota-ku, Tokyo

Real estate

1,160

PROUD FLAT Kamata II

4-25-5 Kamata, Ota-ku, Tokyo

Real estate

3,320

PROUD FLAT Shinotsuka

3-12-10 Minami Otsuka, Toshima-ku, Tokyo

Real estate

623

PROUD FLAT Kiyosumi Shirakawa

2-3 Takabashi, Koto-ku, Tokyo

Real estate

928

PROUD FLAT Monzen Nakacho II

2-6-9 Furuishiba, Koto-ku, Tokyo

Real estate

652

PROUD FLAT Monzen Nakacho I

2-3-1 Tomioka, Koto-ku, Tokyo

Real estate

1,030

PROUD FLAT Fujimidai

3-8-4 Nukui, Nerima-ku, Tokyo

Real estate

1,470

PROUD FLAT Asakusa Komagata

1-10-6 Komagata, Taito-ku, Tokyo

Real estate

1,920

PROUD FLAT Yokohama

8-18 Daimachi Kanagawa-ku, Yokohama-shi, Kanagawa

Real estate

2,090

PROUD FLAT Kamioooka

3-4-6 Kamioooka Nishi, Konan-ku, Yokohama-shi, Kanagawa

Real estate

2,710

PROUD FLAT Tsurumi II

20-16 Toyooka-cho, Tsurumi-ku, Yokohama-shi, Kanagawa

Real estate

1,650

PRIME URBAN Azabu Juban

2-33-9 Higashi Azabu, Minato-ku, Tokyo

Real estate

1,100

PRIME URBAN Akasaka

7-6-19 Akasaka, Minato-ku, Tokyo

Real estate

938

PRIME URBAN Tamachi

3-6-13 Sibaura, Minato-ku, Tokyo

Real estate(Note 4)972

PRIME URBAN Shibaura LOFT

4-5-17 Shibaura, Minato-ku, Tokyo

Real estate

1,830

PRIME URBAN Hatagaya

3-28-6 Hatagaya, Shibuya-ku, Tokyo

Real estate

469

PRIME URBAN Yoyogi

3-51-3 Yoyogi, Shibuya-ku, Tokyo

Real estate

359

PRIME URBAN EbisuⅡ

1-13-3 Hiroo, Shibuya-ku, Tokyo

Real estate

1,140

PRIME URBAN Bancho

2-9-1 Kudanminami, Chiyoda-ku, Tokyo

Real estate

1,090

PRIME URBAN Chiyoda Fujimi

2-1-9 Fujimi, Chiyoda-ku, Tokyo

Real estate

679

PRIME URBAN Iidabashi

4-8-9,11 Iidabashi, Chiyoda-ku, Tokyo

Beneficial
Interest

2,040

PRIME URBAN Ebisu

1-11-11 Mita, Meguro-ku, Tokyo

Real estate

1,260

PRIME URBAN Naka Meguro

3-28-24 Kami Meguro, Meguro-ku, Tokyo

PRIME URBAN Gakugei Daigaku

2-14-14 Takaban, Meguro-ku, Tokyo

PRIME URBAN Senzoku

2-20-8 Senzoku, Meguro-ku, Tokyo

PRIME URBAN Meguro Riverside

2-10-16 Shimo Meguro, Meguro-ku, Tokyo- 18 -

Real estate(Note 4)
Beneficial
Interest
Beneficial
Interest
Real estate

1,410
775
474
414

Area

Greater

Location(Postal Address)

Name of Property

Type ofOwnership(Note 1)

Appraisal Valueas of May 31,2015 (¥ mln)
(Note 2)PRIME URBAN Meguro Ohashi Hills

2-4-16 Ohashi, Meguro-ku, Tokyo

Real estate

2,970

PRIME URBAN Meguro Aobadai

3-18-9 Aobadai, Meguro-ku, Tokyo

Real estate

1,310

PRIME URBAN Gakugei DaigakuⅡ

3-14-15 Takaban, Meguro-ku, Tokyo

Real estate

1,080

PRIME URBAN Naka Meguro II

3-1-3 Kamimeguro, Meguro-ku, Tokyo

Real estate

2,850

Real estate(Note 4)
Beneficial
Interest

PRIME URBAN Kachidoki

6-5-6 Kachidoki, Chuo-ku, Tokyo

PRIME URBAN Shinkawa

2-16-10 Shinkawa, Chuo-ku, Tokyo

PRIME URBAN Nihonbashi Yokoyamacho

3-4 Nihonbashi Yokoyamacho, Chuo-ku, Tokyo

Real estate

4,220

PRIME URBAN Nihonbashi Hamacho

2-50-8 Nihonbashi Hamacho, Chuo-ku, Tokyo

Real estate

1,550

PRIME URBAN Hongo Ikizaka

2-16-3 Hongo, Bunkyo-ku, Tokyo

Real estate

557

PRIME URBAN Hakusan

1-7-9 Mukougaoka, Bunkyo-ku, Tokyo

Real estate

866

PRIME URBAN Yotsuya Gaien Higashi

14-62 Samoncho, Shinjuku-ku, Tokyo

Real estate

1,490

PRIME URBAN Naka Ochiai

1-7-19 Naka Ochiai, Shinjuku-ku, Tokyo

Real estate

604

PRIME URBAN Ochiai

2-17-9 Nakai, Shinjuku-ku, Tokyo

Real estate

338

Beneficial
Interest
Beneficial
Interest
Beneficial
Interest

2,570
2,100

PRIME URBAN Nishi Shinjuku I

1-19-3 Kita Shinjuku, Shinjuku-ku, Tokyo

1,090

PRIME URBAN Nishi Shinjuku II

5-6-4 Nishi Shinjuku, Shinjuku-ku, Tokyo

PRIME URBAN Shinjuku Naitomachi

1-55 Naitomachi, Shinjuku-ku, Tokyo

PRIME URBAN Nishi Waseda

1-13-11 Nishi Waseda, Shinjuku-ku, Tokyo

Real estate

421

PRIME URBAN Shinjuku Ochiai

4-10-9 Kita Shinjuku, Shinjuku-ku, Tokyo

Real estate

594

PRIME URBAN Mejiro

3-22-21 Shimoochiai, Shinjuku-ku Tokyo

Real estate

1,430

PRIME URBAN Kagurazaka346-3 Yamabukityo, Shinjuku-ku, Tokyo

Real estate

2,900

PRIME URBAN Kamiuma

5-26-14 Kamiuma, Setagaya-ku, Tokyo

Real estate

836

PRIME URBAN Sangen JayaⅢ

5-38-12 Kamiuma, Setagaya-ku, Tokyo

Real estate

718

PRIME URBAN Chitose Karasuyama

3-32-16 Kasuya, Setagaya-ku, Tokyo

Real estate

717

PRIME URBAN Sangen Jaya II

2-4-16 Taishido, Setagaya-ku, Tokyo

Real estate

483

PRIME URBAN Sangen Jaya

2-41-3 Sangen Jaya, Setagaya-ku, Tokyo

Real estate(Note 4)724

PRIME URBAN Minami Karasuyama

5-7-4 Minami Karasuyama, Setagaya-ku, Tokyo

Real estate

667

PRIME URBAN Karasuyama Galleria

4-10-24 Minami Karasuyama, Setagaya-ku, Tokyo

Real estate

549

PRIME URBAN Karasuyama Court

4-1-11 Minami Karasuyama, Setagaya-ku, Tokyo

Real estate

338

PRIME URBAN Kamikitazawa

5-21-22 Kami Kitazawa, Setagaya-ku, Tokyo

Real estate

597

PRIME URBAN Chitose Funabashi

5-40-4 Sakuragaoka, Setagaya-ku, Tokyo

Real estate

746

PRIME URBAN Yoga

2-27-5 Yoga, Setagaya-ku, Tokyo

Real estate

1,390

PRIME URBAN Shinagawa Nishi

6-24-13 Yutaka-cho, Shinagawa-ku, Tokyo

Real estate

494

PRIME URBAN Osaki

5-8-10 Osaki, Shinagawa-ku, Tokyo

Real estate

1,860

PRIME URBAN Oimachi II

5-10-10 Higashi Oi, Shinagawa-ku, Tokyo

Real estate

1,040

PRIME URBAN Yukigaya

34-10 Kita Minemachi, Ota-ku, Tokyo

Real estate

951

PRIME URBAN Omori

1-15-1 Omori Kita, Ota-ku, Tokyo

Real estate(Note 4)905

PRIME URBAN Denenchofu Minami

12-5 Denenchofu Minami, Ota-ku, Tokyo

Real estate

774

PRIME URBAN Nagahara Kamiikedai

1-20-18 Kamiikedai, Ota-ku, Tokyo

Real estate

1,720

885
430

Tokyo
Area

- 19 -

Area

GreaterTokyo
Area

Location(Postal Address)

Name of Property

Type ofOwnership(Note 1)

Appraisal Valueas of May 31,2015 (¥ mln)
(Note 2)PRIME URBAN Nakano

2-17-1 Kami Takada, Nakano-ku, Tokyo

Real estate

489

PRIME URBAN Nakano Kamitakada

4-43-3 Kami Takada, Nakano-ku, Tokyo

Real estate

498

PRIME URBAN Takaido

4-10-12 Takaido Higashi, Suginami-ku, Tokyo

Real estate

1,060

PRIME URBAN Nishi Ogikubo

2-27-5 Nishi Ogiminami, Suginami-ku, Tokyo

Real estate

414

PRIME URBAN Nishi Ogikubo II

3-6-9 Nishiogikita, Suginami-ku, Tokyo

Real estate

1,790

PRIME URBAN Otsuka

1-3-4 Nishi Sugamo, Toshima-ku, Tokyo

PRIME URBAN Komagome

6-12-15 Komagome, Toshima-ku, Tokyo

PRIME URBAN Ikebukuro

2-50-4 Ikebukuro, Toshima-ku, Tokyo

Real estate

3,800

PRIME URBAN Monzen Nakacho

1-5-7 Monzen Nakacho, Koto-ku, Tokyo

Real estate

2,420

PRIME URBAN Kameido

2-38-2 Kameido, Koto-ku, Tokyo

Real estate

779

PRIME URBAN Sumiyoshi

2-23-3 Ogibashi, Koto-ku, Tokyo

Real estate

632

PRIME URBAN Mukojima

5-19-14 Higashi Mukojima, Sumida-ku, Tokyo

Real estate

528

PRIME URBAN Kinshi Koen

4-7-12 Taihei, Sumida-ku, Tokyo

Real estate(Note 4)

1,290

PRIME URBAN Kinshicho

5-16-14 Kotobashi, Sumida-ku, Tokyo

Real estate

758

PRIME URBAN Hirai

6-23-12 Hirai, Edogawa-ku, Tokyo

Real estate

722

PRIME URBAN Kasai

6-18-5 Naka Kasai, Edogawa-ku, Tokyo

Real estate

640

PRIME URBAN Kasai II

7-9-7 Higashi Kasai, Edogawa-ku, Tokyo

Beneficial
Interest

981

PRIME URBAN Kasai East

6-16-9 Higashi Kasai, Edogawa-ku, Tokyo

Real estate

1,140

PRIME URBAN Ekoda

1-10-5 Asahigaoka, Nerima-ku, Tokyo

Real estate

409

PRIME URBAN Itabashi Kuyakushomae

27-13 Honcho, Itabashi-ku, Tokyo

Real estate

1,080

PRIME URBAN Asakusa

3-33-11 Asakusa, Taito-ku, Tokyo

Real estate

384

PRIME URBAN Machiya South Court

3-73-5 Arakawa, Arakawa-ku, Tokyo

Real estate

1,910

PRIME URBAN Musashi Koganei

2-11-26 Nakacho, Koganei-shi, Tokyo

Real estate

1,910

PRIME URBAN Musashino Hills

2-1-2, 36 Kajinocho, Koganei-shi, Tokyo

Real estate

1,280

PRIME URBAN Koganei Honcho

4-14-25 Honcho, Koganei-shi Tokyo

Real estate

791

PRIME URBAN Kumegawa

1-5-6 Sakae-cho, Higashimurayama-shi, Tokyo

Real estate

1,520

PRIME URBAN Musashi Kosugi comodo

2-902-1 Shin Maruko Higashi Nakahara-ku, Kawasaki-shi, Kanagawa

Real estate

1,940

PRIME URBAN Kawasaki

1-4-15 Honcho Kawasaki-ku, Kawasaki-shi, Kanagawa

Real estate

962

PRIME URBAN Shinyurigaoka

3-1-17 Manpukuji Asao-ku, Kawasaki-shi, Kanagawa

Real estate

1,150

PRIME URBAN Tsurumi Teraya

1-7-10 Teraya Tsurumi-ku, Yokohama-shi, Kanagawa

Real estate

493

PRIME URBAN Urayasu II

2-11-5 Todaijima, Urayasu-shi, Chiba

Real estate

227

PRIME URBAN Urayasu

3-2-13 Todaijima, Urayasu-shi, Chiba

Real estate

804

PRIME URBAN Gyotoku I

2-4-10 Fukuei, Ichikawa-shi, Chiba

Real estate

633

PRIME URBAN Gyotoku II

1-11-5 Suehiro, Ichikawa-shi, Chiba

Real estate

730

PRIME URBAN Gyotoku Ekimae

2-26-11 Gyotoku Ekimae, Ichikawa-shi, Chiba

Beneficial
Interest

488

PRIME URBAN Gyotoku EkimaeⅡ

4-6-14 Gyotoku Ekimae, Ichikawa-shi, Chiba

Real estate

469

PRIME URBAN GyotokuⅢ

1-2-8 Fukuei, Ichikawa-shi, Chiba

Real estate

747

PRIME URBAN Nishi Funabashi

437-1 Hongocho, Funabashi-shi, Chiba

Beneficial
Interest

761- 20 -

Beneficial
Interest
Beneficial
Interest

730
437

Area
Greater
Tokyo
Area

Other

Location(Postal Address)

Name of Property

PRIME URBAN Kawaguchi

3-1-11 Sakae-cho, Kawaguchi-shi, Saitama

Type ofOwnership(Note 1)
Real estate

Subtotal

Appraisal Valueas of May 31,2015 (¥ mln)
(Note 2)
1,580
132,297

PROUD FLAT Itsutsubashi

2-5-2 Itsutsubashi, Aoba-ku, Sendai-shi, Miyagi

Real estate

652

PROUD FLAT Kawaramachi

2-10 Aza Hachikenkoji, Minami Koizumi, Wakabayashi-ku, Sendai-shi,
MiyagiReal estate

735

PROUD FLAT Shin Osaka

6-11-7 Nishi Nakajima Yodogawa-ku, Osaka-shi, Osaka

Real estate

1,620

PRIME URBAN Yamahana

1-27 Nishi 14-Chome minami 17-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

273

PRIME URBAN Kita Juyo Jo

2-1 Higashi 1-Chome Kita 14-Jo, Higashi-ku, Sapporo-shi, Hokkaido

Real estate

274

PRIME URBAN Odori Koen I

12 Nishi 9-Chome Minami 1-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

502

PRIME URBAN Odori Koen II

12-1 Nishi 9-Chome Minami 1-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

334

PRIME URBAN Kita Juichi Jo

1-3 Higashi 1-Chome Kita 11-Jo, Higashi-ku, Sapporo-shi, Hokkaido

Real estate

547

PRIME URBAN Miyanosawa

10-20 9-Chome Hassamu 6-Jo Nishi-ku, Sapporo-shi, Hokkaido

Real estate

475

PRIME URBAN Odori Higashi

12-63 Higashi 7-Chome Odori, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

394

PRIME URBAN Chiji Koukan

1-12 Nishi 17-Chome Kita 4-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

249

PRIME URBAN Maruyama

1-1, Nishi 22-Chome Kita 4-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

229

PRIME URBAN Kita Nijuyo Jo

2-1 Higashi 1-Chome Kita 23-Jo, Higashi-ku, Sapporo-shi, Hokkaido

Real estate

437

PRIME URBAN Sapporo Idaimae

1-20 Nishi 13-Chome Minami 4-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

616

PRIME URBAN Sapporo Riverfront

1-1 Nishi 1-Chome Minami 9-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

4,480

PRIME URBAN Kita Sanjo Dori

2-2 Higashi 2-Chome Kita 3-Jo, Chuo-ku, Sapporo-shi, Hokkaido

Real estate

1,730

PRIME URBAN Nagamachi Icchome

1-2-30 Nagamachi Icchome, Taihaku-ku, Sendai-shi, Miyagi

Real estate

1,140

PRIME URBAN Yaotome Chuo

3-8-70 Yaotome Chuo, Izumi-ku, Sendai-shi, Miyagi

Real estate

466

PRIME URBAN Tsutsumidori Amamiya

4-37 Tsutsumidori Amamiya-machi, Aoba-ku, Sendai-shi, Miyagi

Real estate

949

PRIME URBAN Aoi

1-13-24 Aoi, Higashi-ku, Nagoya-shi, Aichi

Beneficial
Interest

712

PRIME URBAN Kanayama

4-2-37 Masaki, Naka-ku, Nagoya-shi, Aichi

Real estate

553

PRIME URBAN Tsurumai

5-8-29 Chiyoda Naka-ku, Nagoya-shi, Aichi

Real estate

1,020

PRIME URBAN Kamimaezu

2-4-2 Kamimaezu Naka-ku, Nagoya-shi, Aichi

Real estate

1,590

PRIME URBAN Izumi

1-20-28 Izumi Higashi-ku, Nagoya-shi, Aichi

Real estate

3,770

Beneficial
Interest
Beneficial
Interest

PRIME URBAN Esaka I

3-26-27 Tarumi-cho, Suita-shi, Osaka

652

PRIME URBAN Esaka II

3-31-31 Tarumi-cho, Suita-shi, Osaka

PRIME URBAN Esaka III

10-19 Hiroshiba-cho, Suita-shi, Osaka

Real estate

1,190

PRIME URBAN Tamatsukuri

2-16-11 Tamatsukuri Chuo-ku, Osaka-shi, Osaka

Real estate

1,020

PRIME URBAN Sakaisuji Honmachi

1-5-10 Kyutaro-cho, Chuo-ku, Osaka-shi, Osaka

Real estate

1,810

PRIME URBAN Hakata

2-14-7 Minoshima, Hakata-ku, Fukuoka-shi, Fukuoka

Real estate

588

PRIME URBAN Yakuin Minami

1-14-10 Shirogane, Chuo-ku, Fukuoka-shi, Fukuoka

Real estate

265

PRIME URBAN Kashii

2-3-7 Kashii Ekimae Higashi-ku, Fukuoka-shi, Fukuoka

Real estate

398

PRIME URBAN Hakata Higashi

6-4-23 Yoshizuka Hakata-ku, Fukuoka-shi, Fukuoka

Real estate

622

PRIME URBAN Chihaya

4-11-20 Chihaya Higashi-ku, Fukuoka-shi, Fukuoka

Real estate

604

794

31,690Subtotal

163,987

Total

Note 1: “Beneficial interest” described in “Type of Ownership” refers to the beneficiary right of trusts whose major properties are real estate.
Note2: “Appraisal Value as of May 31, 2015” stands for the prices appraised by the estate surveyors in accordance with the provisions of the Company’s Articles of Incorporation andthe “Rules Concerning Calculations of Investment Corporations” (Cabinet Office Ordinance No. 47 of 2006). The appraisal prices are calculated by Daiwa Real EstateAppraisal, Co., Ltd., Chuo Real Estate Appraisal Co., Ltd., Japan Real Estate Institution, Tanizawa Sogo Appraisal Co., Ltd., Japan Valuers Co., Ltd., using the capitalization- 21 -

approach, with the end of the 17th fiscal period, i.e.May 31, 2015, being taken as the point of evaluation.
Note 3: Residential indication of the property is not available yet.
Note 4: The “Type of Ownership” of the relevant properties is changed from “Beneficial interest” to “Real estate” along with the cancellation or expiration of the term of the trust.

- 22 -

Area

GreaterTokyo
Area

Name of Property

17th Period (from Dec. 1, 2014 to May 31, 2015)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ 000)16th Period (from Jun. 1, 2014 to Nov 30, 2014)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ 000)

PROUD FLAT Shirokane Takanawa

1

99.1

94,522

1.7

1

92.6

93,324

1.7

PROUD FLAT Yoyogi Uehara

1

97.8

30,281

0.5

1

97.9

30,032

0.6

PROUD FLAT Hatsudai

1

94.4

23,074

0.4

1

100.0

23,545

0.4

PROUD FLAT Shibuya Sakuragaoka

1

96.7

22,104

0.4

1

96.7

22,721

0.4

PROUD FLAT Gakugei Daigaku

1

100.0

25,677

0.5

1

95.2

24,247

0.4

PROUD FLAT Meguro Gyoninzaka

1

100.0

29,091

0.5

1

100.0

27,9090.5

PROUD FLAT Sumida Riverside

1

93.7

74,885

1.3

1

97.8

74,255

1.4

PROUD FLAT Kagurazaka

1

97.5

48,404

0.9

1

97.5

47,681

0.9

PROUD FLAT Waseda

1

100.0

35,300

0.6

1

91.7

34,377

0.6

PROUD FLAT Shinjuku Kawadacho

1

96.3

29,855

0.5

1

97.1

30,144

0.6

PROUD FLAT Sangen Jaya

1

96.2

36,777

0.6

1

94.3

32,616

0.6

PROUD FLAT Kamata

1

100.0

39,922

0.7

1

95.8

37,133

0.7

PROUD FLAT Kamata II

1

97.4

106,574

1.9

1

97.5

110,533

2.0

PROUD FLAT Shinotsuka

1

86.0

19,626

0.3

1

100.0

20,473

0.4

PROUD FLAT Kiyosumi Shirakawa

1

100.0

30,743

0.5

1

100.0

30,6790.6

PROUD FLAT Monzen Nakacho II

1

97.5

21,516

0.4

1

100.0

20,762

0.4

PROUD FLAT Monzen Nakacho I

1

98.2

34,475

0.6

1

96.3

34,664

0.6

PROUD FLAT Fujimidai

1

100.0

58,345

1.0

1

100.0

56,237

1.0

PROUD FLAT Asakusa Komagata

1

98.8

63,577

1.1

1

99.0

64,503

1.2

PROUD FLAT Yokohama

1

95.5

73,829

1.3

1

95.4

74,002

1.4

PROUD FLAT Kamioooka

1

100.0

85,367

1.5

1

100.0

69,399

1.3

PROUD FLAT Tsurumi II

1

98.0

64,736

1.1

1

95.2

62,517

1.2

PRIME URBAN Azabu Juban

1

94.8

31,704

0.6

1

93.2

31,311

0.6

PRIME URBAN Akasaka

1

100.0

26,586

0.5

1

90.0

25,7420.5

PRIME URBAN Tamachi

1

93.8

30,800

0.5

1

100.0

30,351

0.6

PRIME URBAN Shibaura LOFT

1

94.6

60,093

1.1

1

91.2

55,7151.0

PRIME URBAN Hatagaya

1

100.0

15,714

0.3

1

94.6

15,614

0.3

PRIME URBAN Yoyogi

1

96.0

12,138

0.2

1

100.0

11,6450.2

PRIME URBAN Ebisu II

1

100.0

33,844

0.6

1

100.0

34,2780.6

PRIME URBAN Bancho

1

98.2

34,281

0.6

1

96.0

32,566

0.6

PRIME URBAN Chiyoda Fujimi

1

100.0

21,630

0.4

1

93.8

20,7000.4

PRIME URBAN Iidabashi

1

95.8

64,145

1.1

1

96.8

61,3891.1

PRIME URBAN Ebisu

1

100.0

37,118

0.7

1

92.8

32,447

0.6

PRIME URBAN Naka Meguro

1

93.9

40,277

0.7

1

91.8

40,274

0.7

PRIME URBAN Gakugei Daigaku

1

100.0

23,574

0.4

1

90.9

24,0770.4

PRIME URBAN Senzoku

1

92.5

16,328

0.3

1

93.7

14,324

0.3

PRIME URBAN Meguro Riverside

1

100.0

14,567

0.3

1

91.5

12,7990.2

PRIME URBAN Meguro Ohashi Hills

1

94.9

82,479

1.5

1

97.4

82,8901.5

PRIME URBAN Meguro Aobadai

1

100.0

37,771

0.7

1

97.7

37,721

0.7

PRIME URBAN Gakugei Daigaku II

1

100.0

30,358

0.5

1

95.7

31,365

0.6

PRIME URBAN Naka Meguro II (Note 2)

1

100.0

70,127

1.2

－

－

－

－

PRIME URBAN Kachidoki

1

95.1

93,137

1.6

1

97.2

85,591

1.6

PRIME URBAN Shinkawa

1

94.9

73,413

1.3

1

98.3

73,8091.4

PRIME URBAN Nihonbashi Yokoyamacho

1

95.4

128,262

2.3

1

99.2

129,110

2.4

PRIME URBAN Nihonbashi Hamacho

1

94.3

47,829

0.8

1

91.2

45,251

0.8

PRIME URBAN Hongo Ikizaka

1

100.0

18,315

0.3

1

100.0

16,954

0.3

PRIME URBAN Hakusan

1

100.0

26,254

0.5

1

100.0

25,9230.5

PRIME URBAN Yotsuya Gaien Higashi

1

89.8

46,078

0.8

1

98.2

43,356

0.8

PRIME URBAN Naka Ochiai

1

94.0

22,591

0.4

1

94.6

23,484

0.4

PRIME URBAN Ochiai

1

94.1

13,442

0.2

1

90.9

12,571

0.2

PRIME URBAN Nishi Shinjuku I

1

95.2

38,098

0.7

1

100.0

35,143

0.6

PRIME URBAN Nishi Shinjuku II

1

95.6

28,424

0.5

1

93.9

27,3330.5

PRIME URBAN Shinjuku Naitomachi

1

100.0

13,185

0.2

1

86.1

12,5840.2

PRIME URBAN Nishi Waseda

1

100.0

11,371

0.2

1

57.1

3,828

0.1

PRIME URBAN Shinjuku Ochiai

1

100.0

21,251

0.4

1

96.1

19,514

0.4

PRIME URBAN Mejiro

1

96.9

42,532

0.8

1

95.3

40,7530.8- 23 -

Area

Name of Property

17th Period (from Dec. 1, 2014 to May 31, 2015)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ 000)16th Period (from Jun. 1, 2014 to Nov 30, 2014)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ 000)PRIME URBAN Kagurazaka

1

97.9

78,698

1.4

1

95.7

77,888

1.4

PRIME URBAN Roka Koen (Note 3)－－

12,423

0.2

1

94.2

11,6880.2

PRIME URBAN Kamiuma

1

96.9

33,616

0.6

1

100.0

33,305

0.6

PRIME URBAN Sangen Jaya

1

93.0

26,326

0.5

1

100.0

26,021

0.5

PRIME URBAN Chitose Karasuyama

1

96.2

27,387

0.5

1

97.3

26,8990.5

PRIME URBAN Sangen Jaya II

1

100.0

17,909

0.3

1

78.8

16,4790.3

PRIME URBAN Karasuyama (Note 3)－－

11,419

0.2

1

86.3

11,621

0.2

PRIME URBAN Sangen Jaya

1

94.2

23,745

0.4

1

97.1

23,981

0.4

PRIME URBAN Minami Karasuyama

1

100.0

23,944

0.4

1

97.6

23,901

0.4

PRIME URBAN Karasuyama Galleria

1

97.0

19,436

0.3

1

94.0

18,202

0.3

PRIME URBAN Karasuyama Court

1

100.0

12,123

0.2

1

95.7

12,0250.2

PRIME URBAN Kamikitazawa

1

100.0

19,247

0.3

1

86.5

21,066

0.4

PRIME URBAN Chitose Funabashi

1

97.2

23,525

0.4

1

97.6

22,5120.4

PRIME URBAN Yoga

1

100.0

42,538

0.8

1

97.6

41,7070.8

PRIME URBAN Shinagawa Nishi

1

95.9

21,964

0.4

1

97.9

21,9690.4

PRIME URBAN Oimachi (Note 4)－－

15,394

0.3

1

95.6

19,3370.4

PRIME URBAN Osaki

1

96.9

57,806

1.0

1

99.0

57,8091.1

PRIME URBAN Oimachi II

1

97.7

49,723

0.9

1

96.4

49,0150.9

PRIME URBAN Yukigaya

1

95.8

36,659

0.6

1

94.7

37,1200.7

PRIME URBAN Omori

1

96.3

31,174

0.6

1

98.1

29,7770.5

PRIME URBAN Denenchofu Minami
PRIME URBAN Nagahara Kamiikedai(Note 2)

1

95.9

25,159

0.4

1

96.1

23,964

0.4

1

84.3

41,736

0.7

－

－

－

－

PRIME URBAN Nakano

1

98.3

18,562

0.3

1

92.9

18,621

0.3

PRIME URBAN Nakano Kamitakada

1

95.0

19,312

0.3

1

97.5

19,6000.4

PRIME URBAN Takaido

1

99.1

38,861

0.7

1

89.9

38,4980.7

PRIME URBAN Nishi Ogikubo

1

95.9

12,483

0.2

1

88.1

12,652

0.2

Greater

PRIME URBAN Nishi Ogikubo II (Note 2)

1

90.0

43,156

0.8

－

－

－

－

Tokyo

PRIME URBAN Otsuka

1

97.9

24,778

0.4

1

100.0

23,8350.4

PRIME URBAN Komagome

1

95.5

18,584

0.3

1

90.5

16,921

0.3

PRIME URBAN Ikebukuro

1

97.6

109,604

1.9

1

96.2

105,594

1.9

PRIME URBAN Monzen Nakacho

1

99.2

77,525

1.4

1

98.3

78,9601.5

PRIME URBAN Kameido

1

98.1

24,052

0.4

1

96.1

26,194

0.5

PRIME URBAN Sumiyoshi

1

100.0

21,418

0.4

1

94.9

19,9830.4

PRIME URBAN Mukojima

1

100.0

21,227

0.4

1

94.6

21,3090.4

PRIME URBAN Kinshi Koen

1

97.4

42,315

0.7

1

98.7

41,7820.8

PRIME URBAN Kinshicho

1

100.0

23,952

0.4

1

100.0

23,946

0.4

PRIME URBAN Hirai

1

98.1

23,331

0.4

1

94.3

23,8890.4

PRIME URBAN Kasai

1

97.8

21,648

0.4

1

100.0

21,2030.4

PRIME URBAN Kasai II

1

92.6

33,671

0.6

1

97.1

32,3080.6

PRIME URBAN Kasai East

1

100.0

41,300

0.7

1

100.0

36,6300.7

PRIME URBAN Ekoda

1

94.3

15,254

0.3

1

100.0

14,954

0.3

PRIME URBAN Itabashi Kuyakushomae

1

98.3

38,208

0.7

1

94.9

37,3120.7

PRIME URBAN Asakusa

1

95.4

15,303

0.3

1

95.4

15,702

0.3

PRIME URBAN Machiya South Court

1

97.7

73,623

1.3

1

97.7

73,503

1.4

PRIME URBAN Musashi Koganei

1

95.9

74,742

1.3

1

94.9

73,675

1.4

PRIME URBAN Musashino Hills

1

100.0

50,224

0.9

1

95.1

47,9020.9

PRIME URBAN Koganei Honcho

1

93.1

29,123

0.5

1

86.9

28,3470.5

PRIME URBAN Hino (Note 3)－－

15,014

0.3

1

98.1

13,4770.2

PRIME URBAN Kumegawa

1

96.6

57,999

1.0

1

95.7

56,8471.0

PRIME URBAN Musashi Kosugi comodo

1

96.8

71,176

1.3

1

98.4

71,772

1.3

PRIME URBAN Kawasaki

1

98.0

38,496

0.7

1

96.9

37,2430.7

PRIME URBAN Shinyurigaoka

1

100.0

37,441

0.7

1

100.0

37,4080.7

PRIME URBAN Tsurumi Teraya

1

98.3

20,779

0.4

1

92.0

20,1690.4

PRIME URBAN Urayasu II

1

100.0

8,691

0.2

1

100.0

8,927

0.2

PRIME URBAN Urayasu

1

98.3

28,294

0.5

1

96.7

26,8720.5

PRIME URBAN Gyotoku I

1

100.0

24,022

0.4

1

88.5

21,921

0.4

Area- 24 -

Area

Greater
Tokyo
Area

Other

Name of Property

17th Period (from Dec. 1, 2014 to May 31, 2015)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ 000)16th Period (from Jun. 1, 2014 to Nov 30, 2014)
Rentalat Period End
Portion of
Revenues
RentalNumber ofduring the
Occupancy
Revenues
Tenants
PeriodRate (%)(%)(Note 1)(¥ 000)PRIME URBAN Minami Gyotoku III(Note 3)－－

11,438

0.2

1

100.0

12,1880.2

PRIME URBAN Gyotoku II

1

100.0

24,638

0.4

1

100.0

24,7820.5

PRIME URBAN Gyotoku Ekimae

1

97.3

16,226

0.3

1

91.9

17,123

0.3

PRIME URBAN Gyotoku Ekimae II

1

100.0

20,186

0.4

1

97.8

19,9070.4

PRIME URBAN Gyotoku

1

98.7

32,931

0.6

1

88.3

31,453

0.6

PRIME URBAN Nishi Funabashi

1

98.3

26,980

0.5

1

100.0

25,465

0.5

PRIME URBAN Kawaguchi

1

98.4

58,993

1.0

1

100.0

55,952

1.0

URBAN STAGE Komazawa (Note 5)
URBAN STAGE Minami Gyotoku II(Note 6)URBAN STAGE Minami Gyotoku IV(Note 7)

－

－

－

－

－

－

12,895

0.2

－

－

－

－

－

－

11,755

0.2

－

－

－

－

－

－

1,662

0.0

Subtotal

114

97.0

4,413,970

78.0

116

96.2

4,179,650

77.0

PROUD FLAT Itsutsubashi

1

100.0

30,048

0.5

1

100.0

30,500

0.6

PROUD FLAT Kawaramachi

1

100.0

30,111

0.5

1

95.7

30,101

0.6

PROUD FLAT Shin Osaka

1

93.9

60,754

1.1

1

98.3

61,2501.1

PRIME URBAN Yamahana

1

97.5

13,021

0.2

1

100.0

12,9830.2

PRIME URBAN Kita Juyo Jo

1

93.6

12,621

0.2

1

84.9

13,1100.2

PRIME URBAN Odori Koen I

1

100.0

17,144

0.3

1

100.0

17,156

0.3

PRIME URBAN Odori Koen II

1

100.0

11,133

0.2

1

100.0

11,1370.2

PRIME URBAN Kita Juichi Jo

1

95.0

24,876

0.4

1

100.0

25,305

0.5

PRIME URBAN Miyanosawa

1

98.4

22,935

0.4

1

96.2

22,9670.4

PRIME URBAN Odori Higashi

1

89.7

18,183

0.3

1

96.8

18,532

0.3

PRIME URBAN Chiji Koukan

1

97.6

13,135

0.2

1

95.2

12,7180.2

PRIME URBAN Maruyama

1

96.3

11,459

0.2

1

100.0

11,581

0.2

PRIME URBAN Kita Nijuyo Jo

1

91.6

20,459

0.4

1

100.0

19,9090.4

PRIME URBAN Sapporo Idaimae

1

95.7

28,602

0.5

1

96.8

27,3180.5

PRIME URBAN Sapporo Riverfront

1

97.6

188,927

3.3

1

96.7

186,968

3.4

PRIME URBAN Kita Sanjo Dori

1

97.0

69,778

1.2

1

99.0

67,617

1.2

PRIME URBAN Nagamachi Icchome

1

97.3

43,069

0.8

1

98.0

42,681

0.8

PRIME URBAN Yaotome Chuo

1

100.0

19,982

0.4

1

100.0

19,6550.4

PRIME URBAN Tsutsumidori Amamiya

1

98.2

45,302

0.8

1

98.2

45,0540.8

PRIME URBAN Aoi

1

96.2

25,059

0.4

1

98.1

23,506

0.4

PRIME URBAN Kanayama

1

100.0

24,035

0.4

1

100.0

24,106

0.4

PRIME URBAN Tsurumai

1

97.1

41,621

0.7

1

97.1

43,8450.8

PRIME URBAN Kamimaezu

1

90.6

53,413

0.9

1

96.2

56,3231.0

PRIME URBAN Izumi

1

96.7

129,861

2.3

1

96.4

133,229

2.5

PRIME URBAN Esaka I

1

89.5

21,709

0.4

1

83.4

20,4400.4

PRIME URBAN Esaka II

1

93.1

27,177

0.5

1

91.4

27,5000.5

PRIME URBAN Esaka III

1

85.9

40,042

0.7

1

90.6

40,2700.7

PRIME URBAN Tamatsukuri

1

94.7

35,905

0.6

1

91.3

34,9780.6

PRIME URBAN Sakaisuji Honmachi

1

84.7

59,646

1.1

1

94.8

61,597

1.1

PRIME URBAN Hakata

1

97.3

28,274

0.5

1

92.3

28,6920.5

PRIME URBAN Yakuin Minami

1

91.7

13,370

0.2

1

93.1

13,1500.2

PRIME URBAN Kashii

1

91.7

15,408

0.3

1

88.4

15,7450.3

PRIME URBAN Hakata Higashi

1

94.3

25,169

0.4

1

95.7

25,551

0.5

PRIME URBAN Chihaya

1

96.1

23,101

0.4

1

94.1

22,8450.4

Subtotal

34

95.6

1,245,347

22.0

34

96.3

1,248,335

23.0

Total

148

96.6

5,659,317

100.0

150

96.2

5,427,985

100.0

Note 1: In the case that a part of or all rental units in individual properties are placed on the rental market, and the tenant of the relevant Lease Agreement (Master Lease
Agreement) has entered into an agreement on subleasing the relevant rental unit with the end-tenant (actual sublessee), we deem the lesser of the relevant Master Lease
Agreement as one (1). In the case that a specific tenant rents multiple units in a specific property, we deem the tenant of the relevant property as one (1). If a tenant rents
units in multiple properties, we show the number of the properties rented by the relevant tenant as the number of tenants.
Note 2: The relevant properties were acquired on December 19, 2014 The figure shown in the “rental revenues during the 17th fiscal period” column is after the date of acquisition..
Note 3: The relevant properties were sold on May 29, 2015. The figure shown in the “rental revenues during the 17th fiscal period” column is before the date of selling.
Note 4: The relevant properties were sold on April 21, 2015. The figure shown in the “rental revenues during the 17th fiscal period” column is before the date of selling.
Note 5: The relevant properties were sold on November 27, 2014. The figure shown in the “rental revenues during the 16th fiscal period” column is before the date of selling.
Note 6: The relevant properties were sold on November 28, 2014. The figure shown in the “rental revenues during the 16th fiscal period” column is before the date of selling.
Note 7: The relevant properties were sold on June 30, 2014. The figure shown in the “rental revenues during the 16th fiscal period” column is before the date of selling.

- 25 -

4. OUTSTANDING AMOUNT AND CURRENT PRICE OF SPECIFIED TRANSACTIONS
The outstanding amount and current price of the specified transactions as of May 31, 2015 are as follows.
Segment
Transaction other than market transaction

Contract Amount(¥ mln) (Note 1)
Longer than a Year

Type of Transaction
Interest-rate swap
(Receiving floating-rate, paying fixed-rate)
Total

Current Price(¥ mln) (Note 2)

54,10044,400△423

54,10044,400△423

Note 1: Presented based on notional principal of contract.
Note 2: Evaluated at the price provided by the counterparty based on the prevailing market rate.

5. STATUS OF THE OTHER ASSETS
Other than the Trust Beneficial Interest and Real Estate listed in the table under the title “3. Details of Portfolio Properties”,
the Company had no other assets to integrate into the portfolio as of May 31, 2015.

6. STATUS OF ASSETS BY COUNTRY AND REGIONThe Company had no assets in countries or regions outside Japan.

- 26 -

Capital Expenditures
1. PLAN OF CAPITAL EXPENDITURES
The table below lists major capital expenditures in conjunction with the refurbishment and/or renewal works scheduled forthe future (finished in part) on the properties held as of May 31, 2015. The estimated cost of works includes the amount to be
charged as “expenses” for accounting purposes.
Name of Property (Location)

Description of Works (Purpose)

Estimated Period

Total

Estimated Cost (¥000)
Paid during
Paid before
17th Period
17th Period

PRIME URBAN Oimachi II(Shinagawa-ku, Tokyo)

Intercom replacement

From
To

: Oct. 2015
: Nov. 2015

5,000

-

-

PRIME URBAN Asakusa(Taito-ku, Tokyo)

Water supply pipe rehabilitation

From
To

: Sep. 2015
: Nov. 2015

3,670

-

-

PRIME URBAN Musashino Hills(Koganei-shi, Tokyo)

Major repair (Building B)

From
To

: Jun. 2015
: Jun. 2015

29,687--PRIME URBAN Gyotoku EkimaeⅡ(Ichikawa-shi, Chiba)

Major repair

From
To

: Aug. 2015
: Nov. 2015

18,850--PRIME URBAN GyotokuⅢ(Ichikawa-shi, Chiba)

Major repair

From
To

: Aug. 2015
: Nov. 2015

14,900--PRIME URBAN Tsutsumidori Amamiya(Aoba-ku, Sendai-shi)

Entrance renewal

From
To

: Sep. 2015
: Nov. 2015

14,000--2. CAPITAL EXPENDITURES DURING THE 17TH FISCAL PERIOD
The table below lists capital expenditures during the 17th fiscal period in conjunction with the major works of renovation.
During the period, we have conducted engineering works totaling ¥404,609 thousand: capital expenditures of ¥76,255
thousand and repair expenses of ¥328,354thousand combined all together.
Name of Property (Location)

Description of Works (Purpose)

Period of Works

Cost of Works (¥000)

PRIME URBAN Ebisu(Meguro-ku, Tokyo)

Elevator parts replacement

From : May 2015
To
: May 2015

2,618

PRIME URBAN Takaido(Suginami-ku, Tokyo)

Elevator parts replacement

From : Apr. 2015
To
: May 2015

2,628

PRIME URBAN Koganei Honcho(Koganei-shi, Tokyo)

Elevator parts replacement

From : May 2015
To
: May 2015

2,201

PRIME URBAN Musashi Kosugi comodo
Common area renovation(Kawasaki-shi, Kanagawa)

From : Apr. 2015To
: Apr. 2015

2,065

Other Properties

From : Dec. 2014
To
: May 2015

66,741

Housing equipment renewal

Total

76,255

3. FUNDS RESERVED FOR THE LONG-TERM REPAIR PLANS
Subject to the long-term schedule for repairs and maintenance set down for each building, the Company has accounted forreserves from the operating cash flow to prepare for large-scale engineering works to be carried out in the future.

Balance brought forward from theprevious period
Amount reserved during the period
Amount used during the period
Balance brought forward to the next
period17th Period
from Dec. 1, 2014
to May 31, 2015

16th Period
from Jun. 1, 2014
to Nov. 30, 2014

15th Period
from Dec. 1, 2013
to May 31, 2014

14th Period
from Jun. 1, 2013
to Nov. 30, 2013

13th Period
from Dec. 1, 2012
to May 31, 2013(¥ mln)

1,950

1,829

1,745

1,651

1,548

(¥ mln)(¥ mln)

259
158

243
122

180
96

175
81

176
73

(¥ mln)

2,051

1,950

1,829

1,745

1,651

- 27 -

Expenses and Liabilities
1. EXPENSES RELATED TO ASSET MANAGEMENT

Asset management fees (Note 1)of which Management Fee I
of which Management Fee IIof which Management Fee III (Note 2)
Custodian fees
General administrative fees
Directors’ compensation
Other expenses
Total(¥000)(¥000)(¥000)－(¥000)(¥000)(¥000)(¥000)(¥000)

17th Period
From Dec. 1, 2014
to May 31, 2015
397,803
209,535
188,267－
15,67422,7207,200
250,560
693,957

16th Period
From Jun. 1, 2014
to Nov. 30, 2014
397,390
210,348
187,041－
15,944
26,171
5,600
213,461
658,568

Note 1: In addition to the items shown above, asset management fees related to the acquisition of properties calculated in the book value of individual real estate, etc. were 63,000
thousand yen for the 17th fiscal period.
Note 2: If the total assets listed on the balance sheet as of the date of settlement during the fiscal period immediately before the relevant fiscal period is less than 300 billion yen,management fee III for the relevant fiscal period is not applied.

2. STATUS OF BORROWINGSThe status of borrowings from the financial institutions as of May 31, 2015 is as follows.
Current Portion of Long-term debt
Date Borrowed

Outstanding
as of May31, 2015(¥000)

Outstanding
as of Dec.
1, 2014(¥000)

Average
Interest
Rate (%)(Note 1)The Bank of Fukuoka, Ltd.

Feb. 26, 2010-

1,000,000

1.79200

Development Bank of Japan, Inc.

May 15, 2007-

1,300,000

2.23500

The Nomura Trust and Banking Co., Ltd.

-

1,000,000

The Iyo Bank, Ltd.

-

1,000,000-

1,900,000

Mizuho Trust & Banking Co., Ltd.

-

1,000,000

The Tokyo Tomin Bank, Limited-

500,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,800,000

1,800,000

Sumitomo Mitsui Banking Corporation

1,800,000

1,800,000

2,500,000

2,500,000

Mitsubishi UFJ Trust and Banking
Corporation

1,800,000

1,800,000

Sumitomo Mitsui Trust Bank, Limited

1,800,000

1,800,000

Financial Institutions

Resona Bank, Ltd.

Feb. 27, 2012

Mizuho Bank, Ltd.

Feb. 27, 2012

0.96365

Date of
Repayment

Method of
Repayment(Note 4)

Unsecured/
UninsuredFeb. 27,
2015
Balloonpayment

1.00900

Aug. 27,2015

Dec. 26, 2011

4,700,000-

1.00000

Dec. 26,
2015

Development Bank of Japan, Inc.

Aug. 27, 2009

80,00080,0002.10000(Note 2)

(Note 2)Development Bank of Japan, Inc.

Feb. 26, 2010

100,000

100,000

2.03000(Note 3)(Note 3)

14,580,000

17,580,000- 28 -

Note

Feb. 26,
2015
Feb. 27,
2015

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Subtotal

Use ofBorrowings

Long-term debt

Financial Institutions

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Date Borrowed

Outstanding
as as of May
31, 2015(¥000)

Outstanding
as of Dec.
1, 2014(¥000)

Average Interest
Rate (%)(Note 1)

Date of
Repayment

Dec. 26, 2011-

4,700,000

1.00000

Dec. 26,2015

4,700,000

4,700,000
1.11700

Jun. 26,2016

0.69000

Feb. 26,
2017

Sumitomo Mitsui Banking Corporation
Mitsubishi UFJ Trust and Banking
Corporation

Dec. 26, 2011
4,700,000

4,700,000

500,000

500,000

800,000

800,000

500,000

500,000

750,000

750,000

1,100,000

1,100,000

1,100,000

1,100,000

Shinkin Central Bank

1,720,000

1,720,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

750,000-

Sumitomo Mitsui Banking Corporation

750,000-

550,000-

Mitsubishi UFJ Trust and Banking
Corporation

750,000-

Sumitomo Mitsui Trust Bank, Limited

500,000-

1,000,000-

The Tokyo Tomin Bank, Limited

500,000-

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,300,000

1,300,000

Sumitomo Mitsui Banking Corporation

1,300,000

1,300,000

900,000

900,000

Sumitomo Mitsui Trust Bank, Limited

520,000

520,000

Mizuho Bank, Ltd.

900,000

900,000

Aozora Bank, Ltd.

500,000

500,000

1,800,000

1,800,000

1,800,000

1,800,000

1,800,000

1,800,000

1,100,000-

400,000

400,000

400,000

400,000

Mizuho Bank, Ltd.

400,000

400,000

Mitsubishi UFJ Trust and Banking
Corporation

400,000

400,000

Resona Bank, Ltd.
Shinkin Central Bank

Oct. 25, 2013

Aozora Bank, Ltd.
The Chiba Bank, Ltd.

Aug. 27, 2014

Mitsui Sumitomo Insurance Co., Ltd.
Daido Life Insurance Company

Mizuho Bank, Ltd.

Aug. 27, 2012

Dec. 18, 2014

The Iyo Bank, Ltd.
Feb. 27, 2015

Mitsubishi UFJ Trust and Banking
Corporation

Aug. 27, 2012

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation

Sep. 30, 2013

Mitsubishi UFJ Trust and Banking
Corporation
Mitsui Sumitomo Insurance Co., Ltd.

Dec. 18, 2014

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Dec. 3, 2012

0.55091

Aug. 26,2017

1.08500

Aug. 27,2017

0.51000

Nov. 26,2017（Note5）0.55091

Feb. 26,2018

1.12013

Feb. 27,2018

0.99000

Aug. 26,2018

0.69894

May 26,2019

1.16500

Nov. 26,
2019

Taiyo Life Insurance Company

May 23, 2013

1,000,000

1,000,000

1.48625

The Dai-Ichi Life Insurance Company,
Limited

Sep. 30, 2013

800,000

800,000

1.28277- 29 -

May 27,2020
Aug. 26,
2020

Method of
Repayment

Use ofBorrowings

Note

Balloonpayment(Note 4)

Unsecured/
UninsuredOutstanding
as as of May
31, 2015(¥000)

Outstanding
as of Dec.
1, 2014(¥000)The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Banking Corporation

1,000,000

1,000,000

1,000,000

1,000,000

Sumitomo Mitsui Trust Bank, Limited

600,000

600,000

Mizuho Bank, Ltd.

600,000

600,000

Mizuho Trust & Banking Co., Ltd.

500,000

500,000

Financial Institutions

Mitsubishi UFJ Trust and Banking
Corporation

Date Borrowed

Oct. 25, 2013

Average Interest
Rate (%)(Note 1)

Date of
Repayment

1.18000

Aug. 26,
2020

Nippon Life Insurance Company

Oct. 25, 2013

500,000

500,000

1.15566

Taiyo Life Insurance Company

Feb. 27, 2014

2,000,000

2,000,000

1.17750

Mizuho Bank, Ltd.

May 23, 2013

1,000,000

1,000,000

1.68200

Development Bank of Japan, Inc.

May 23, 2013

3,500,000

3,500,000

1.62500

The Nomura Trust and Banking Co., Ltd.

Feb 27, 2014

2,700,000

2,700,000

1.24100

The Nomura Trust and Banking Co., Ltd.

1,000,000-

Mizuho Trust & Banking Co., Ltd.

1,000,000-

The Bank of Fukuoka, Ltd.

1,000,000-

Resona Bank, Ltd.

1,900,000-

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Banking Corporation

1,000,000

1,000,000

1,500,000

1,500,000

Sumitomo Mitsui Trust Bank, Limited

500,000

500,000

Mizuho Bank, Ltd.

500,000

500,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

100,000

100,000

100,000

100,000

Sumitomo Mitsui Trust Bank, Limited

1,780,000

1,780,000

Mizuho Bank, Ltd.

1,000,000

1,000,000

0.97410

Feb 27, 2015

Mitsubishi UFJ Trust and Banking
Corporation

Feb 27, 2014

Sumitomo Mitsui Banking Corporation
Sep. 5, 2014

Method of
Repayment

Use ofBorrowings

Note(Note 4)

Unsecured/
UninsuredAug. 26,2020
Feb. 26,2021
May 27,2021
May 27,2021
Aug. 26,
2021

Nov. 26,2021

1.31850

Feb. 26,2022

1.19700

Aug. 26,
2022

Balloonpayment

Development Bank of Japan, Inc.

Feb. 27, 2015

1,300,000-

1.13250

Feb. 26,2023

Development Bank of Japan, Inc.

Aug. 27, 2009

1,080,000

1,120,000

2.10000(Note 2)

(Note 2)Development Bank of Japan, Inc.

Feb. 26, 2010

1,400,000

1,450,000

2.03000(Note 3)(Note 3)

Subtotal

66,550,000

59,240,000

Total

81,130,000

76,820,000

Note 1：The average interest rate is weighted by the balance of each borrowing as at the end of the period and rounded to the nearest fifth decimal place. As for the borrowings, whichwere hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate the weighted average of interest.
Note 2：Instalments of ¥40 million will be made on the 27th day of every 6th month starting on February 27, 2010, with the remaining payment of ¥1,080 million to be repaid on
August 27, 2016.
Note 3：Instalments of ¥50 million will be made on the 26th day of every 6th month starting on August 26, 2010, with the remaining payment of ¥1,350 million to be repaid on
February 26, 2017.
Note 4：The use of borrowings is to purchase property-related assets, the related miscellaneous expenses and the repayment of borrowings.
Note 5：The borrowing was fully repaid on June 17, 2015 in advance to the maturity date.

- 30 -

3. STATUS OF INVESTMENT CORPORATION BONDS
The status of investment corporation bonds issued as of May 31, 2015 is as follows.
Name of Bonds

Issue Date

Balance as ofMay. 31, 2015(¥ mln)Balance as of
Nov. 30, 2014(¥ mln)First Series Unsecured Investment
Feb. 25, 2011
5,000
Corporation Bonds
Second Series Unsecured Investment
Feb. 24, 2012
5,000
Corporation Bonds
Total
10,000Note 1: The uses of proceeds are to repay borrowings.
Note 2: Ranking Pari Passu among the specified investment corporation bonds.

Interest
Rate
(%)

5,000

1.21

Feb. 25, 2016

5,000

1.03

Feb. 24, 2017

10,000

4. STATUS OF SHORT-TERM INVESTMENT CORPORATION BONDS
Not applicable.

- 31 -

Maturity Date

Method of
Repayment

Use ofProceeds

Note

Balloonpayment(Note 1)

(Note 2)

Trading during the 17th Fiscal Period
1. STATUS OF REAL ESTATES AND ASSET-BACKED SECURITIES TRADING
Acquisition
Type of Asset

Trust
Beneficial Interest
Trust
Beneficial Interest
Trust
Beneficial Interest

Name of Property

PRIME URBAN Naka Meguro II(Note 3)PRIME URBAN Nagahara Kamiikedai(Note 3)PRIME URBAN Nishi Ogikubo II(Note 3)

Transfer

Price (¥000)

Date

Price (¥000)

Date(Note 1)

(Note 1)

Gain
(Loss)(¥000)

Book
Value(¥000)(Note 2)

Dec. 19 2014

2,800,000

－

－

－

－

Dec. 19 2014

1,720,000

－

－

－

－

Dec. 19 2014

1,780,000

－

－

－

－

Real Estate

PRIME URBAN Oimachi－－

Apr. 21, 2015

555,000

527,144

12,033

Real Estate

PRIME URBAN Roka Koen－－

May 29, 2015

355,000

358,079△2,583

Real Estate

PRIME URBAN Karasuyama－－

May 29, 2015

358,000

340,871

6,853

Real Estate

PRIME URBAN Hino－－

May 29, 2015

301,568

301,317△8,005

Real Estate

PRIME URBAN Minami Gyotoku III－－

May 29, 2015

258,000

256,248△5,408

1,827,568

1,783,662

2,890

Total

6,300,000

Note 1: “Acquisition Price” and “Transfer Price” do not include various costs (intermediary fees, taxes and duties, etc.) required for acquisition or transfer of the property (thepurchase and sale price of the real estate, etc., as indicated in the Transfer Agreement of Trust Beneficial Interest or Real Estate).
Note 2: For transfer, other sales expenses in addition to the above have been incurred, and “Gain (Loss)” is inclusive of this amount.
Note 3: After acquiring Trust Beneficial Interest, whose real estate is trust property, on the date of acquisition shown above, the Company dissolved the Trust Contract and held theproperty as real estate.

2. STATUS OF OTHER ASSETS
Not applicable. In addition, the Company’s assets other than the above mentioned properties and asset-backed securities, aremostly comprised of direct bank deposits and bank deposits in trust.

3. PRICE INVESTIGATION(1) Real Estates
Acquisition/Transfer
Acquisition/Transfer

Type of Asset

Name of Property
Date

PRIME URBAN Naka Meguro II

Transfer

Real Estate(Note 2)
Real Estate(Note 2)
Real Estate(Note 2)
Real EstateTransfer

Real EstateTransfer
Transfer

Acquisition
Acquisition
Acquisition

Transfer

Price (¥000)

Appraisal Value(¥000)(Note 1)

Dec. 19 2014

2,800,000

2,850,000

Dec. 19 2014

1,720,000

1,730,000

Dec. 19 2014

1,780,000

1,790,000

PRIME URBAN Oimachi

Apr. 21, 2015

555,000

488,000

PRIME URBAN Roka Koen

May 29, 2015

355,000

324,000

Real Estate
Real Estate

PRIME URBAN Karasuyama

May 29, 2015

358,000

345,000

PRIME URBAN Hino

May 29, 2015

301,568

323,000

Real Estate

PRIME URBAN Minami Gyotoku III

May 29, 2015

258,000

240,000(Note 3)PRIME URBAN Nagahara Kamiikedai(Note 3)PRIME URBAN Nishi Ogikubo II(Note 3)Note 1: “Acquisition Price” and “Transfer Price” do not include various costs (intermediary fees, taxes and duties, etc.) required for acquisition or transfer of the property (thepurchase and sale price of the real estate, etc., as indicated in the Transfer Agreement of Trust Beneficial Interest or Real Estate).
Note 2: After acquiring Trust Beneficial Interest, whose real estate is trust property, on the date of acquisition shown above, the Company dissolved the Trust Contract and held theproperty as real estate.

(2) Others
With regard to the properties the Company has traded but not included in the above table “(1) Real Estate,” the price investigation
procedures were conducted by Akira Sugai C.P.A. Office subject to the requirement by Article 201 of the Investment Trust Act.
For the 17th fiscal period (from December 1, 2014 to May 31, 2015), one interest-rate swap transaction was subject to investigation.
Akira Sugai C.P.A. Office was requested to investigate the details of the relevant transaction including the name of counterparty, agreed
figures, type of financial product or index, the trading period, and the contents of the relevant derivatives transactions. The investigation
report has been received.

- 32 -

4. TRANSACTIONS WITH RELATED PARTIES(1) Transactions
Not applicable.
(2) Fees Paid to Related Parties
Table of fees paid to related parties during the 17th fiscal period is as follows.
Item

Amount Paid (A)(¥000)Name of Related Party

Real estate, etc. intermediary fees
Contract-out fees
Property management fees
Commission

Total Amount Paid
(B)(¥000)
44,417
206,540
318,003
139,616

Portion(A) / (B)(%)
100.0%
78.2%
80.2%
1.6%

44,417
Nomura Real Estate Urban Net Co., Ltd.
Nomura Real Estate Partners Co., Ltd.
161,515
Nomura Real Estate Partners Co., Ltd.
255,168
Nomura Real Estate Partners Co., Ltd.
2,282
Note: The term “related parties” refers to related parties of Asset Management Companies as stipulated by Article 123 of the Enforcement Order of the Act on Investment Trusts andInvestment Corporations and by Article 26, Paragraph 1, Item 27 of the Regulations Concerning Investment Reports of Investment Trusts and Investment Corporations, issued
by the Investment Trusts Association, Japan.

In addition, the following are the property management fees paid to related party Nomura Real Estate Partners Co., Ltd.
shown as a breakdown by property.
Property Name

Property Management Fees(¥000)
5,295
1,871
1,069
1,040
1,766
2,127
4,154
2,375
2,800
1,473
2,773
3,260
4,704
1,140
614
1,355
2,285
2,589
3,247
3,484
1,832
3,388
2,768
1,864
1,884
4,008
975
1,088
1,389
2,384
1,590
4,026
1,561
2,967
2,092
1,307
1,158
3,794
1,477
1,284
4,253
4,965

PROUD FLAT Shirokane Takanawa
PROUD FLAT Yoyogi Uehara
PROUD FLAT Hatsudai
PROUD FLAT Shibuya Sakuragaoka
PROUD FLAT Gakugei Daigaku
PROUD FLAT Meguro Gyoninzaka
PROUD FLAT Sumida Riverside
PROUD FLAT Kagurazaka
PROUD FLAT Waseda
PROUD FLAT Shinjuku Kawadacho
PROUD FLAT Sangen Jaya
PROUD FLAT Kamata
PROUD FLAT Kamata II
PROUD FLAT Shinotsuka
PROUD FLAT Kiyosumi Shirakawa
PROUD FLAT Monzen Nakacho II
PROUD FLAT Monzen Nakacho I
PROUD FLAT Fujimidai
PROUD FLAT Asakusa Komagata
PROUD FLAT Yokohama
PROUD FLAT Kamioooka
PROUD FLAT Tsurumi II
PRIME URBAN Azabu Juban
PRIME URBAN Akasaka
PRIME URBAN Tamachi
PRIME URBAN Shibaura LOFTPRIME URBAN Hatagaya
PRIME URBAN Yoyogi
PRIME URBAN EbisuⅡ
PRIME URBAN Bancho
PRIME URBAN Chiyoda Fujimi
PRIME URBAN Iidabashi
PRIME URBAN Ebisu
PRIME URBAN Naka Meguro
PRIME URBAN Gakugei Daigaku
PRIME URBAN Senzoku
PRIME URBAN Meguro Riverside
PRIME URBAN Meguro Ohashi Hills
PRIME URBAN Meguro Aobadai
PRIME URBAN Gakugei DaigakuⅡ
PRIME URBAN Naka Meguro II
PRIME URBAN Kachidoki- 33 -

Property Name

Property Management Fees(¥000)
1,927
5,507
2,536
920
1,428
2,852
1,486
792
2,019
1,689
1,118
1,449
1,358
4,453
1,021
1,461
1,379
1,516
1,509
1,144
1,573
1,187
1,348
837
1,818
1,817
2,133
1,335
1,119
2,932
3,316
2,293
1,996
1,718
1,975
1,239
1,180
2,702
1,041
2,986
1,572
1,550
7,466
4,418
1,578
1,522
1,645
2,490
718
1,680
1,455
2,837
5,924
614
1,791
1,085
4,590
4,257
2,265
2,417
835
3,900
2,487

PRIME URBAN Shinkawa
PRIME URBAN Nihonbashi Yokoyamacho
PRIME URBAN Nihonbashi Hamacho
PRIME URBAN Hongo Ikizaka
PRIME URBAN Hakusan
PRIME URBAN Yotsuya Gaien Higashi
PRIME URBAN Naka Ochiai
PRIME URBAN Ochiai
PRIME URBAN Nishi Shinjuku I
PRIME URBAN Nishi Shinjuku II
PRIME URBAN Shinjuku Naitomachi
PRIME URBAN Nishi Waseda
PRIME URBAN Shinjuku Ochiai
PRIME URBAN Kagurazaka
PRIME URBAN Roka Koen
PRIME URBAN Kamiuma
PRIME URBAN Sangen JayaⅢ
PRIME URBAN Chitose Karasuyama
PRIME URBAN Sangen Jaya II
PRIME URBAN Karasuyama
PRIME URBAN Sangen Jaya
PRIME URBAN Minami Karasuyama
PRIME URBAN Karasuyama Galleria
PRIME URBAN Karasuyama Court
PRIME URBAN Kamikitazawa
PRIME URBAN Chitose Funabashi
PRIME URBAN Yoga
PRIME URBAN Shinagawa Nishi
PRIME URBAN Oimachi
PRIME URBAN Osaki
PRIME URBAN Oimachi II
PRIME URBAN Yukigaya
PRIME URBAN Omori
PRIME URBAN Denenchofu Minami
PRIME URBAN Nagahara Kamiikedai
PRIME URBAN Nakano
PRIME URBAN Nakano Kamitakada
PRIME URBAN Takaido
PRIME URBAN Nishi Ogikubo
PRIME URBAN Nishi Ogikubo II
PRIME URBAN Otsuka
PRIME URBAN Komagome
PRIME URBAN Ikebukuro
PRIME URBAN Monzen Nakacho
PRIME URBAN Kameido
PRIME URBAN Sumiyoshi
PRIME URBAN Mukojima
PRIME URBAN Kinshi Koen
PRIME URBAN Kinshicho
PRIME URBAN Hirai
PRIME URBAN Kasai
PRIME URBAN Kasai II
PRIME URBAN Kasai East
PRIME URBAN Ekoda
PRIME URBAN Itabashi Kuyakushomae
PRIME URBAN Asakusa
PRIME URBAN Machiya South Court
PRIME URBAN Musashi Koganei
PRIME URBAN Musashino Hills
PRIME URBAN Koganei Honcho
PRIME URBAN Hino
PRIME URBAN Kumegawa
PRIME URBAN Musashi Kosugi comodo- 34 -

Property Name

Property Management Fees(¥000)
2,682
1,111
1,435
639
1,263
2,142
570
767
1,019
905
3,252
1,775
2,864

PRIME URBAN Kawasaki
PRIME URBAN Shinyurigaoka
PRIME URBAN Tsurumi Teraya
PRIME URBAN Urayasu II
PRIME URBAN Urayasu
PRIME URBAN Gyotoku I
PRIME URBAN Minami Gyotoku III
PRIME URBAN Gyotoku II
PRIME URBAN Gyotoku Ekimae
PRIME URBAN Gyotoku EkimaeⅡ
PRIME URBAN GyotokuⅢ
PRIME URBAN Nishi Funabashi
PRIME URBAN Kawaguchi

5. STATUS OF BUSINESS WITH THE ASSET MANAGEMENT COMPANY OVER ITS SUBSIDIARY BUSINESS
Although Nomura Real Estate Asset Management Co., Ltd., the asset management company of the Company, conducts
subsidiary business of Type II Financial Instruments Business, and Building Lots and Buildings Transaction Business there is
no relevant matter under this subject as of May 31, 2015.

- 35 -

Other Information
1. NOTICE
Not applicable. Please see “1. Asset Management Report (2) OUTLINE OF INVESTMENTS IN THE 17TH FISCALPERIOD (e) Merger with Nomura Real Estate Master Fund, Inc. and Nomura Real Estate Office Fund, Inc.” for the boardof directors’ approval regarding the conclusion of the new merger agreement for the Merger.

2. STATUS OF BENEFICIAL INTEREST IN INVESTMENT TRUSTS ESTABLISHED BY THE COMPANY
Not applicable.

3. STATUS OF COMPANIES OWNING REAL ESTATE OVERSEAS AND OF SUCH REAL ESTATE
Not applicable.

4. OTHER MATTERS
From 1 page to 36 pages of this report, the numbers of amount below unit are truncated and the numbers in percentage arerounded to unit unless otherwise mentioned specifically.

- 36 -

Financial Section

Contents
Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Statement of Cash Flows
Notes to Financial Statements

38
40
41
42
43

- 37 -

Balance Sheet
Thousands of Yen
As of November 30, 2014

As of May 31, 2015

ASSETS
Current Assets:
Cash and bank deposits¥9,292,604¥8,678,028

Rental receivables

30,077

29,626

Other current assets

125,743

66,591

(909)

(603)

9,447,515

8,773,642

Land

92,008,161

88,481,743

Buildings and structures

79,708,066

78,508,908

Machinery and equipment

1,094,608

1,086,014

Tools, furniture and fixtures

231,388

233,426-

3,045

173,042,223

168,313,136(13,207,843)(12,283,591)

159,834,380

156,029,545

Intangible assets

495

1,016

Security deposits

10,756

10,879Long-term prepaid expenses

4,818

11,530

Deferred investment corporation bond issuance costs

18,16225,432

34,231

48,857¥169,316,126¥164,852,044

Allowance for doubtful accounts
Total current assets

Property and Equipment, at Cost:

Construction in progress
SubtotalLess accumulated depreciation
Net property and equipment

Investments and Other Assets:

Total investments and other assets

Total Assets
The accompanying notes to financial statements are an integral part of these statements.

- 38 -

Thousands of Yen
As of November 30, 2014

As of May 31, 2015

LIABILITIESCurrent Liabilities:
Trade accounts payable¥357,631¥267,594

Other accounts payable

310,506

341,726

Current portion of investment corporation bonds

5,000,000-

Current portion of long-term debt

14,580,000

17,580,000

108,989

115,149875

881

Accrued consumption taxes

15,475

8,832

Rent received in advance

754,693

702,508

Other current liabilities

11,862

6,777

21,140,031

19,023,467

Investment corporation bonds

5,000,000

10,000,000

Long-term debt

66,550,000

59,240,000

Security deposits from tenants

1,470,987

1,440,198

Total long-term liabilities

73,020,987

70,680,198

Total Liabilities

94,161,018

89,703,665

73,231,054

73,231,054

52,00040,000Retained earnings

1,872,054

1,877,325

Total surplus

1,924,054

1,917,325

Total unitholders’ equity

75,155,108

75,148,379

Total Net Assets

75,155,108

75,148,379¥169,316,126¥164,852,044

Accrued expenses
Accrued income taxes

Total current liabilities

Long-term Liabilities:

NET ASSETS
Unitholders’ Equity:
Unitholders’ capital
Surplus
Voluntary reserve
Reserve for reduction entry

Total Liabilities and Net Assets
The accompanying notes to financial statements are an integral part of these statements.

- 39 -

Statement of Income and Retained Earnings
Thousands of Yen
For the period
from December 1, 2014
to May 31, 2015

For the period
from June 1, 2014
to November 30, 2014

Operating Revenues and Expenses
Operating Revenues:
Real estate rental revenues
Gain on sales of real estate¥5,659,317

Operating Expenses:
Real estate rental expenses
Loss on sales of real estate
Asset management fees
Asset custody fee
Administrative service fees
Provision of allowance for doubtful accounts
Bad debts expenses
Other operating expenses¥5,427,985

18,887

52,833

5,678,204

5,480,818

2,543,528

2,353,783

15,99745,282397,803397,391

15,675

15,94522,72026,171

309

603

29

448

257,422

218,0103,253,483

3,057,633

2,424,721

2,423,185

755

862

4,768

3,127

498

504

159

110

6,180

4,603

456,899

458,481

34,642

23,71656,18955,929

7,270

7,270

2,877

4,275

557,877

549,671

Ordinary Income

1,873,024

1,878,117

Income before Income Taxes

1,873,024

1,878,117

1,028

1,056

(13)

(165)

1,872,009

1,877,22645

99¥1,872,054¥1,877,325

Operating Profit

Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Income from casualty insurance for property
Reversal of dividends payable
Other non-operating revenues
Non-Operating Expenses:
Interest expense
Loan arrangement fees
Interest expense on investment corporation bonds
Amortization of investment corporation bond issuance costs
Other non-operating expenses

Income Taxes:
Current
Deferred
Net Income
Retained earnings brought forward
Retained Earnings at End of Period
The accompanying notes to financial statements are an integral part of these statements.

- 40 -

Statement of Changes in Net Assets
For the period from December 1, 2014 to May 31, 2015
Thousands of Yen

Unitholders’ Equity
Surplus
Units

Balance as of December 1, 2014

Voluntary
Reserve
Reserve for
Reduction
Entry

Unitholders’CapitalRetained
Earnings

Total
Unitholders’EquityTotal Surplus

Total
Net Assets

160,800¥ 73,231,054¥40,000¥1,877,325¥1,917,325¥75,148,379¥75,148,379

Cash distribution paid
Provision of reserve for
reduction entry

-

-

-

(1,865,280)(1,865,280)(1,865,280)(1,865,280)--

12,000(12,000)---

Net income

-

-

-

1,872,009

1,872,009

1,872,009

1,872,009

160,800¥ 73,231,054¥52,000¥1,872,054¥1,924,054¥75,155,108¥75,155,108

Balance as of May 31, 2015

For the period from June 1, 2014 to November 30, 2014
Thousands of Yen

Unitholders’ Equity
Surplus
Voluntary
Reserve
Reserve for
Reduction
Entry

Unitholders’CapitalUnits

Retained
Earnings

Total Surplus

Total
Unitholders’EquityTotal
Net Assets

Balance as of June 1, 2014

160,800¥73,231,054¥40,000¥1,955,588¥1,995,588¥75,226,642¥75,226,642

Cash distribution paid

-

-

-

(1,955,489)(1,955,489)(1,955,489)(1,955,489)

Net income

-

-

-

1,877,226

1,877,226

1,877,226

1,877,226

160,800¥ 73,231,054¥40,000¥1,877,325¥1,917,325¥75,148,379¥75,148,379

Balance as of November 30, 2014

The accompanying notes to financial statements are an integral part of these statements.

- 41 -

Statement of Cash Flows
Thousands of Yen
For the period
from December 1, 2014
to May 31, 2015

For the period
from June 1, 2014
to November 30, 2014

Cash Flows
Cash Flows from Operating Activities
Income before income taxes¥1,873,024¥1,878,117

Depreciation

1,071,655

1,052,024

7,270

7,270

Amortization of investment corporation bonds issuance costs
Interest income

(755)

(862)

Interest expense

513,089

514,409

Increase (Decrease) in allowance for doubtful accounts

306

508

Decrease (Increase) in rental receivables

(451)

274

Decrease (Increase) in prepaid expenses

22,631(6,331)

Increase (Decrease) in trade accounts payable

90,038(46,280)

Increase (Decrease) in other accounts payable(14,980)

25,773

Increase (Decrease) in accrued consumption taxes

6,643(42,234)

Increase (Decrease) in rent received in advance

52,184(22,576)

Decrease in tangible fixed assets due to sales

1,783,662

921,601

Other(72,340)

29,606

5,331,976

4,311,299

755

862

(519,249)(514,931)(1,034)(1,003)

4,812,448

3,796,227

Payments for purchases of property and equipment(6,675,811)(191,062)

Reimbursement of security deposits to tenants(176,423)(122,797)

Proceeds from security deposits from tenants

209,994

115,425(27)-

SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

Cash Flows from Investing Activities

Payments for security deposits
Proceeds from collection of security deposits
Net cash provided by (used in) investing activities

150-(6,642,117)(198,434)

Cash Flows from Financing Activities
Proceeds from long-term debt

12,100,000

3,730,000

Repayment of long-term debt

(7,790,000)(6,660,000)

Distributions to unitholders(1,865,755)(1,955,191)

2,444,245(4,885,191)

Net cash provided by (used in) financing activities
Net Increase (Decrease) in Cash and Cash Equivalents

614,576(1,287,398)

Cash and Cash Equivalents at Beginning of Period

8,678,028

9,965,426

Cash and Cash Equivalents at End of Period¥9,292,604¥8,678,028

The accompanying notes to financial statements are an integral part of these statements.

- 42 -

Notes to Financial Statements
1.

ORGANIZATION
Nomura Real Estate Residential Fund, Inc. (the “Company”) is a real estate investment corporation formed to own and invest primarily inresidential rental properties. The Company is externally managed by a licensed asset management company, Nomura Real Estate AssetManagement Co., Ltd. (“NREAM”). NREAM is a wholly-owned subsidiary of Nomura Real Estate Holdings, Inc.
On August 3, 2006, the Company was incorporated under the Act on Investment Trusts and Investment Corporations (the “Investment TrustAct”) of Japan. On February 14, 2007, the Company was listed on the Tokyo Stock Exchange as the 41st J-REIT and started operations
on the following day. As of May 31, 2015, the Company owned a portfolio of 148 residential rental properties containing an aggregate of
approximately 276,194.09 square meters of leasable area and leased space to 148 tenants.

2.

BASIS OF PRESENTATIONThe Company maintains its accounting records and prepares its financial statements in accordance with accounting principles generally
accepted in Japan (“Japanese GAAP”), including provisions set forth in the Investment Trust Act of Japan, the Companies Act of Japan, theFinancial Instruments and Exchange Act of Japan and related regulations, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Company, which were prepared inaccordance with Japanese GAAP and were presented in the Securities Report of the Company filed with the Kanto Local Finance Bureau.
In preparing the accompanying financial statements, certain reclassifications and modifications have been made to the financial statements
issued domestically in order to present them in a format that is more familiar to readers outside Japan. In addition, the notes to financial
statements include certain information that might not be required under Japanese GAAP but is presented herein as additional information.
Amounts have been rounded to the nearest thousand of yen in the accompanying financial statements and the notes thereto, whereas
amounts were truncated in the Japanese financial statements prepared in accordance with Japanese GAAP.
The Company’s fiscal period is a six-month period which ends at the end of May or November. The Company does not prepare
consolidated financial statements because it has no subsidiaries.

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments that are highly liquid, readily
convertible to cash, with an insignificant risk of market value fluctuation, and with a maturity of three months or less when purchased.
Property and equipment
Property and equipment are stated at cost, which includes the purchase price and related costs for acquisition, less accumulated
depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the fixed assets outlined below:
Buildings
3 - 70 years
Structures
2 - 50 years
Machinery and equipment
3 - 15 years
Tools, furniture and fixtures
3 - 15 years
Intangible assets
Intangible assets are amortized by the straight-line method.
Long-term prepaid expenses
Long-term prepaid expenses are amortized by the straight-line method.
Impairment of fixed assets
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying value of its fixed
assets may not be recoverable. An impairment loss is recognized if the carrying value of an asset exceeds the aggregate estimated future
cash flows. If a fixed asset is determined to be impaired, it is written down to its recoverable amount and the write-down is recorded as an
impairment loss during the period in which it occurs. No impairment losses have been recognized to date.
Deferred investment corporation bond issuance costs
Deferred investment corporation bond issuance costs are amortized by the straight-line method over the respective terms of the bonds.
Allowance for doubtful accounts
For allowance for doubtful accounts against possible losses arising from default on receivables, uncollectable amount is estimated andrecorded by investigating collectability based on historical loan loss ratios for general receivables and on a case-by-case examination for
doubtful and other specific receivables.
Accounting treatment of beneficial interests in real estate
All assets and liabilities held in trust, for which the real estate in possession of the Company was entrusted, and all related earnings andexpenses incurred are reflected in the accompanying balance sheet and statement of income and retained earnings, respectively.
Revenue recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating revenues including utility
charge reimbursements, parking space rental revenues and other income. Rental revenues are generally recognized on an accrual basis- 43 -

over the life of each lease. Utility charge reimbursements are recognized when earned and their amounts are reasonably estimated.
Property related taxes
Property in Japan is subject to property taxes, urban planning taxes and depreciable property taxes on a calendar year basis. The taxes
related to property are generally imposed based on the value of the relevant property and incurred for fiscal period.
The seller of a property is liable for property related taxes for the period from the purchase date through the end of that calendar year
because taxes are imposed on the owner registered in the record as of January 1 for the entire year based on the assessment made by the
local government. The amount applicable to the buyer of a property is usually settled between each party and capitalized as part of theacquisition cost of the property. The capitalized property related taxes amounted to ¥572 thousand for the six-month period ended May 31,
2015.No capitalized property related taxes were incurred for the six-month periods ended November 30, 2014.
Income taxes
Deferred tax assets and liabilities are computed based on the differences between the financial statements and income tax bases of assets
and liabilities using the applicable statutory tax rates.
Consumption taxes
Consumption taxes received and paid are not included in the accompanying statement of income and retained earnings.
Derivative financial instruments
The Company utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its exposure tochanges in interest rates. The Company defers recognition of gains or losses resulting from changes in the fair value of interest-rate swap
contracts which meet the criteria for deferral hedge accounting.
Although the deferred hedge treatment is generally applied, the Company applies special treatment to those interest-rate swap
contracts that meet the criteria for such special treatment. Under the special treatment, interest-rate swaps are not remeasured at fair value;
instead, the net amount paid or received under the interest rate swap contract is recognized and included in interest expense or income.

4.

CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of May 31, 2015 and November 30, 2014 consist of the following:Thousands of Yen
As of May 31, 20155.

As of November 30, 2014

Cash and bank deposits¥9,292,604¥8,678,028

Cash and cash equivalents¥9,292,604¥8,678,028

SCHEDULE OF PROPERTY AND EQUIPMENT
Property and equipment as of May 31, 2015 and November 30, 2014 consist of the following:Thousands of Yen
As of May 31, 2015
Acquisition costs
Land

Book value¥82,653,562

Buildings and structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation

As of November 30, 2014
Acquisition costs¥82,653,562¥73,930,463

62,021,004(10,000,243)

73,323,986(11,302,982)¥73,930,463

69,721,547

1,044,567

59,721,304

1,035,973
660,997(348,985)(74,035)

138,675(61,941)

144,652

-

-

3,045

3,045

Land in trust

9,354,599

9,354,599

14,551,280

14,551,280

Buildings and structures in trust

6,384,080

Tools, furniture and fixtures
Accumulated depreciation
Construction in progress

Accumulated depreciation
Machinery and equipment in trust(383,570)

Book value

212,710(1,411,651)

Accumulated depreciation(31,046)
18,678

Accumulated depreciation
Total

206,593

8,787,361
4,972,429

50,041Tools, furniture and fixtures in trust

686,988(1,838,138)

6,949,223

50,041
18,995(29,083)

20,95826,833(4,559)14,119(5,201)

21,632¥159,834,380¥159,834,380¥156,029,545¥156,029,545- 44 -

6.

SHORT-TERM DEBT
Short-term debt as of May 31, 2015 and November 30, 2014 consist of the following:
As of November 30, 2014

As of May 31, 2015
Amount(Thousands of Yen)

Amount(Thousands of Yen)

Weighted-averageinterest rate

Weighted-averageinterest rate
(Note 1)

(Note 1)

Unsecured loans from a bank due on February 26, 2015--

¥1,000,000

1.79200%

Unsecured loans from a bank due on February 27, 2015--

1,300,000

2.23500%

Unsecured loans from banks due on February 27, 2015--

5,400,000

0.96365%

Unsecured loans from banks due on August 27, 2015

¥9,700,000

1.00900%

9,700,000

1.00900%

Unsecured loans from a bank due on December 26, 2015

4,700,000

1.00000%--

Unsecured loans from a bank due on August 27, 2016 (Note 2)

80,0002.10000%

80,0002.10000%

Unsecured loans from a bank due on February 26, 2017 (Note 3)

100,000

2.03000%

100,000

2.03000%

Total¥17,580,000¥14,580,000

Note 1: The weighted-average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to the nearest fifth decimal
place. As for the borrowings, which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest
rates are used to calculate the weighted average of interest.
Note 2: Installments of ¥40 million will be made on the 27th day of every sixth month starting on February 27, 2010, with the remaining payment of ¥1,080
million to be repaid on August 27, 2016.
Note 3: Installments of ¥50 million will be made on the 26th day of every sixth month starting on August 26, 2010, with the remaining payment of ¥1,350
million to be repaid on February 26, 2017.

7.

LONG-TERM DEBT
Long-term debt as of May 31, 2015 and November 30, 2014 consist of the following:
As of November 30, 2014

As of May 31, 2015
Amount(Thousands of Yen)

Amount(Thousands of Yen)

Weighted-averageinterest rate

(Note 1)

(Note 1)

Unsecured loans from a bank due on December 26, 2015

Weighted-averageinterest rate--

¥4,700,000

1.00000%

Unsecured loans from banks due on June 26, 2016

¥9,400,000

1.11700%

9,400,000

1.11700%

Unsecured loans from banks due on February 26, 2017

1,800,000

0.69000%

1,800,000

0.69000%

Unsecured loans from a bank due on August 26, 2017

750,000

0.55091%

750,000

0.56182%

Unsecured loans principally from insurance companies due on August27, 2017
Unsecured loans from banks due on November 26, 2017 (Note 4)

3,920,000

1.08500%

3,920,000

1.08500%

3,300,000

0.51000%--

Unsecured loans from banks due on February 26, 2018

1,500,000

0.55091%--

Unsecured loans from banks due on February 27, 2018

5,420,000

1.12013%5,420,000

1.12013%

Unsecured loans from banks due on August 26, 2018

5,400,000

0.99000%

5,400,000

0.99000%

Unsecured loans principally from an insurance company due on May 26,
2019
Unsecured loans from banks due on November 26, 2019

1,100,000

0.69894%--1,600,000

1.16500%

1,600,000

1.16500%

Unsecured loans from an insurance company due on May 27, 2020

1,000,000

1.48625%

1,000,000

1.48625%

Unsecured loans from an insurance company due on August 26, 2020

800,000

1.28277%

800,000

1.28277%

4,700,000

1.18000%

4,700,000

1.18000%

Unsecured loans from an insurance company due on August 26, 2020

500,000

1.15566%

500,000

1.15566%

Unsecured loans from an insurance company due on February 26, 2021

2,000,000

1.17750%

2,000,000

1.17750%

Unsecured loans from a bank due on May 27, 2021

1,000,000

1.68200%

1,000,000

1.68200%

Unsecured loans from a bank due on May 27, 2021

3,500,000

1.62500%

3,500,000

1.62500%

Unsecured loans from a bank due on August 26, 2021

2,700,000

1.24100%

2,700,000

1.24100%

Unsecured loans from banks due on November 26, 2021

4,900,000

0.97410%--

Unsecured loans from banks due on February 26, 2022

4,500,000

1.31850%

4,500,000

1.31850%

Unsecured loans from banks due on August 26, 2022

2,980,000

1.19700%

2,980,000

1.19700%

Unsecured loans from a bank due on February 26, 2023

1,300,000

1.13250%--

Unsecured loans from a bank due on August 27, 2016 (Note 2)

1,080,000

2.10000%

1,120,000

2.10000%

Unsecured loans from a bank due on February 26, 2017 (Note 3)

1,400,000

2.03000%

1,450,000

2.03000%

Unsecured loans from banks due on August 26, 2020

Total

¥66,550,000- 45 -¥59,240,000Note 1: The weighted-average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to the nearest fifth decimal
place. As for the borrowings, which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest
rates are used to calculate the weighted average of interest.
Note 2: Installments of ¥40 million will be made on the 27th day of every sixth month starting on February 27, 2010, with the remaining payment of ¥1,080
million to be repaid on August 27, 2016.
Note 3: Installments of ¥50 million will be made on the 26th day of every sixth month starting on August 26, 2010, with the remaining payment of ¥1,350
million to be repaid on February 26, 2017.
Note 4: The borrowing was fully repaid on June 17, 2015 in advance to the maturity date.

The scheduled repayment amounts of long-term debt for each of the five years after the balance sheet date (excluding the current
portion of long-term debt) are as follows.

Long-term debt

8.

1-2 years
13,680,000

2-3 years
14,890,000

Thousands of Yen
4-5 years
2,600,000

3-4 years
6,500,000

INVESTMENT CORPORATION BONDS
Details of investment corporation bonds outstanding are summarized as follows:
As of November 30, 2014

As of May 31, 2015

Amount(Thousands of Yen)

Weighted- averageinterest rate

Amount(Thousands of Yen)

Weighted- averageinterest rate

¥5,000,000

1.21000%¥5,000,000

1.21000%

5,000,000

1.03000%

5,000,000

1.03000%

First series of unsecured investment corporation bonds
Due on February 25, 2016
Second series of unsecured investment corporation bonds
Due on February 24, 2017
Total

¥10,000,000¥10,000,000

The scheduled redemption amounts of investment corporation bonds for each of the five years after the balance sheet date are as follows.

Investment corporation bonds

9.

Within a year
5,000,000

1-2 years
5,000,000

2-3 years－

3-4 years－

Thousands of Yen
4-5 years－

UNITHOLDERS’ EQUITYThe Company issues only non-par value investment units in accordance with the Investment Trust Act. The entire amount of the issue
price of new units is designated as stated capital. The Company is required to maintain net assets of at least ¥50,000 thousand as set forthin the Investment Trust Act.

10. PER UNIT INFORMATIONThe net asset values per unit and the net income per unit as of May 31, 2015 and November 30, 2014 were as follows:

Net asset values per unit
Net income per unit

For the period
from December 1, 2014
to May 31, 2015
¥467,382¥11,641

For the period
from June 1, 2014
to November 30, 2014
¥467,340¥11,674

The net income per unit is calculated by dividing net income by the weighted-average number of units outstanding for the respective
six-month period.
Note: The basis for calculating net income per unit is as follows.

Net income (Thousands of Yen)
Amount not available to ordinary unitholders (Thousands of Yen)
Net income available to ordinary unitholders (Thousands of Yen)
Average number of units during the period

For the period
from December 1, 2014
to May 31, 2015
¥1,872,009¥1,872,009
160,800- 46 -For the period
from June 1, 2014
to November 30, 2014
¥1,877,226¥1,877,226
160,800

11. RELATED PARTY TRANSACTIONS
For the periods from December 1, 2014 to May 31, 2015 and from June 1, 2014 to November 30, 2014
Parent company and major corporate unitholders
Not applicable
Subsidiaries and affiliates
Not applicable
Fellow subsidiary companies
Not applicable
Directors and major individual unitholders
Not applicable

12. INCOME TAXESThe Company, as an investment corporation, is subject to corporate income taxes at a statutory tax rate of approximately 34% for thesix-month periods ended May 31, 2015 and November 30, 2014. However, the Company may deduct dividend distributions paid to its
unitholders from its taxable income amounts, provided such distributions meet the requirements under the Act on Special Measures
Concerning Taxation of Japan. Under this act, an investment corporation must meet a number of tax requirements, including a requirement
to distribute in excess of 90% of its distributable income for the fiscal period, in order to deduct such amounts. If the investment
corporation does not satisfy all of the requirements, the entire taxable income of the investment corporation will be subject to regular
corporate income taxes.
Since the Company distributed in excess of 90% of its distributable income in the form of cash distributions totaling ¥1,872,034 thousandand ¥1,865,280 thousand for the six-month periods ended May 31, 2015 and November 30, 2014, respectively, such distributions weretreated as deductible distributions for purposes of corporate income taxes. The following summarizes the significant differences between
the statutory tax rate and the effective tax rate:
For the period
For the period
from June 1, 2014
from December 1, 2014
to November 30, 2014
to May 31, 2015
Statutory tax rate
34.16%
34.15%
Deductible cash distributions(33.93)(34.13)
Other(0.18)
0.03
Effective tax rate
0.05%
0.05%

13. FINANCIAL INSTRUMENTS
Overview(1) Policy for Financial Instruments
Upon acquisition of property-related assets, the Company may raise funds through certain financing methods including borrowings,
issuance of investment corporation bonds and issuance of investment units. In financing through interest-bearing debt, to secure stablefinancing capability and reduce future risks of rising interest rates, the Company’s investment policy is to secure longer-term, fixed-rateborrowings with well-diversified maturities.
The Company enters into derivative transactions only for the purpose of reducing risk of future interest rate fluctuations and does notengage in speculative transactions.
(2) Type and Risk of Financial Instruments and Related Risk Management
Debts and investment corporation bonds are primarily used to fund the acquisition of property-related assets as well as the repayment ofdebts and redemption of investment corporation bonds. The Company is exposed to liquidity risk of being unable to meet its obligations onscheduled due dates. The Company controls and limits such risk by diversifying not only the financial institutions, but also the type offinancing to include the effective use of surplus funds and direct financing from the capital markets such as issuance of investment units. In
addition, the Company is exposed to the market risk arising from fluctuations in interest rates on its floating-rate debts. However, the effectof such risk on the operation of the Company is limited by maintaining the LTV ratio at low levels and the ratio of long-term fixed-rate
debts to total debt at high levels. Furthermore, the Company may utilize derivative transactions (interest-rate swap transactions) as ahedging instrument to reduce the market risk under floating-rate debts by swapping such floating-rate interest payments for fixed-rateinterest payments.
Bank deposits are held as a means of investing surplus funds, and the Company is exposed to the credit risk that financial institutions
may default. However, the effect of such risk is limited by diversifying the financial institutions with which surplus funds are deposited.
(3) Supplementary Explanation on Estimated Fair Value of Financial Instruments
The fair value of financial instruments is based on the quoted market price, if applicable. When there is no quoted market price available,
fair value is reasonably estimated. Certain assumptions are used for the estimation of fair value. Accordingly, the result of such estimation
may change if different assumptions are used. Furthermore, the contractual amounts of derivative transactions stated in “19. Derivatives
and Hedge Accounting” below do not represent the market risk involved in these derivative transactions.

- 47 -

Fair Value of Financial Instruments
For the period from December 1, 2014 to May 31, 2015
The following table summarizes the carrying value and the estimated fair values of financial instruments as of May 31, 2015.
Thousands of Yen

( i )
(ii)
(iii)
(iv)
(v)
(vi)

Cash and bank deposits
Current portion of investment corporation
bonds
Current portion of long-term debt
Investment corporation bonds
Long-term debt
Derivative transactions

Carrying value (Note 1)¥9,292,604

Fair value (Note 1)¥9,292,604

Difference(5,000,000)(5,034,680)¥34,680(14,580,000)(5,000,000)(66,550,000)－(14,608,335)(5,061,465)(67,365,494)－

28,33561,465815,494－－

For the period from June 1, 2014 to November 30, 2014
The following table summarizes the carrying value and the estimated fair values of financial instruments as of November 30, 2014.
Thousands of Yen

( i )
(ii)
(iii)
(iv)
(v)
(vi)

Cash and bank deposits
Current portion of investment corporation
bonds
Current portion of long-term debt
Investment corporation bonds
Long-term debt
Derivative transactions

Carrying value (Note 1)¥8,678,028

Fair value (Note 1)¥8,678,028

Difference

－

－

－

(17,580,000)(10,000,000)(59,240,000)－(17,634,302)(10,132,475)(60,080,734)－¥54,302132,475
840,734－－

Note 1: The numbers in parenthesis indicate liabilities.
Note 2: Method for determining the fair value of financial instruments and derivative transactions(i) Cash and bank deposits
As these items are settled within a short-term period, their fair value is nearly equal to the carrying value. Therefore, for these items, the carrying
value is reported as the fair value.
(ii) Current portion of investment corporation bonds and (iv) Investment corporation bonds
The fair value of investment corporation bonds issued by the Company is determined based on their market prices.
(iii) Current portion of long-term debt and (v) Long-term debt
For floating-rate long-term debt, the carrying value is reported as it is considered to be approximately equal to the fair value because such debt
reflects the market interest rates within a short-term period. (However, the fair value of certain floating-rate long-term debt that qualifies for the
special treatment of interest-rate swaps (see “19. Derivatives and Hedge Accounting”) is determined by discounting the sum of its principal andinterest payments net of any cash flows from the interest-rate swap at a rate reasonably estimated to be applicable to similar fixed-rate debt.) The
fair value of fixed-rate long-term debt is determined by discounting the sum of its principal and interest payments at a rate reasonably estimatedto be applicable to similar fixed-rate debt.
(ⅵ) Derivative transactions
See “19. Derivatives and Hedge Accounting.”
Note 3: Redemption schedule for cash and bank deposits as of May 31, 2015
Thousands of Yen
After four years,
After five years
within five years

Due within one
year

After one year,
within two years

After two years,
within three years

After three years,
within four years

Cash and bank deposits¥9,292,604

－

－

－

－

－

Total

¥9,292,604

－

－

－

－

－

Redemption schedule for cash and bank deposits as of November 30,2014

Cash and bank deposits
Total

Due within one
year¥8,678,028

After one year,
within two years－

After two years,
within three years－

After three years,
within four years－¥8,678,028

－

－

－

- 48 -

Thousands of Yen
After four years,
After five years
within five years
－
－
－

－

Note 4: Redemption schedule for investment corporation bonds and debt as of May 31, 2015
Thousands of Yen
After four years,
After five years
within five years

Due within one
year

After one year,
within two years

After two years,
within three years

After three years,
within four years

Current portion of investment
corporation bonds¥5,000,000

－

－

－

－

－

Current portion of long-term debt

14,580,000

－

－

－

－

－

Investment corporation bonds－¥5,000,000

－

－

－

－

Long-term debt－

13,680,000¥14,890,000¥6,500,000¥2,600,000¥28,880,000¥19,580,000¥18,680,000¥14,890,000¥6,500,000¥2,600,000¥28,880,000

Total

Redemption schedule for investment corporation bonds and debt as of November 30, 2014
Due within one
year

After one year,
within two years

After two years,
within three years

After three years,
within four years

Thousands of Yen
After four years,
After five years
within five years¥17,580,000

－

－

－

－

Investment corporation bonds－¥5,000,000¥5,000,000

－

－

－

Long-term debt－

15,320,000

7,820,000¥10,820,000¥1,600,000¥23,680,000¥17,580,000¥20,320,000¥12,820,000¥10,820,000¥1,600,000¥23,680,000

Current portion of long-term debt

Total

－

14. INVESTMENT AND RENTAL PROPERTIESThe Company owns in its portfolio certain residential buildings (including land) for lease located in Tokyo and other areas. The following
table summarizes the carrying value and the estimated fair value of these properties.
Thousands of Yen
For the period
from December 1, 2014
to May 31, 2015

For the period
from June 1, 2014
to November 30, 2014

Carrying value
Balance at beginning of the period¥156,029,545¥157,793,123

Change during the period

3,804,835(1,763,578)

Balance at end of the period

159,834,380

156,029,545

Fair value¥163,987,000¥156,590,000
Note1: The carrying value represents the acquisition cost less accumulated depreciation.
Note2: The major increase in the carrying value during the period ended May 31, 2015 was mainly due to the acquisition of PRIME URBAN Naka
Meguro II (¥2,893,473 thousand), PRIME URBAN Nagahara Kamiikedai(¥1,801,017 thousand) and PRIME URBAN Nishi Ogikubo II (¥1,855,088
thousand) and the major decrease in the carrying value during the period ended May 31, 2015 was mainly due to depreciation and the sale of PRIMEURBAN Roka Koen (¥358,080 thousand), PRIME URBAN Karasuyama (¥340,872 thousand) , PRIME URBAN Oimachi (¥527,145 thousand) ,PRIME URBAN Hino (¥301,317 thousand) and , PRIME URBAN Minami Gyotoku III (¥256,249 thousand). The major decrease in the carrying
value during the period ended November 30, 2014 was mainly due to the sale of URBAN STAGE Minami Gyotoku IV (¥243,477 thousand),
URBAN STAGE Komazawa (¥399,641 thousand) and URBAN STAGE Minami Gyotoku II (¥278,483 thousand).
Note3: The fair value as of May 31, 2015 and November 30, 2014 represents the sum of the appraisal values estimated by external real estate appraisers.

The real estate rental revenues and expenses for the six-month period ended May 31, 2015 and November 30, 2014 are presented in “16.
Breakdown of Real Estate Rental Revenues and Expenses.”

15. SEGMENT INFORMATION
For the period from December 1, 2014 to May 31, 2015 and from June 1, 2014 to November 30, 2014
Segment Information
Since the Company has been engaged in the real estate leasing business as a single segment, segment information has been omitted.
Related Information
1. Information about products and services
Since revenues from external customers of products and services within a single segment are more than 90 percent of total operating
revenues, information about products and services has been omitted.
2. Information about geographical areas(1) Revenues
Since more than 90 percent of the total operating revenues were generated from external customers in Japan, geographicalbreakdown of revenues has been omitted.
(2) Property and equipment
Since more than 90 percent of the total property and equipment on the balance sheet are located in Japan, geographical breakdownof property and equipment has been omitted.

- 49 -

3. Information about major clients
Information about major clients for the six-month period ended May 31, 2015 and November 30, 2014 were as follows:
For the six-month period from December 1, 2014 to May 31, 2015
Name of client
Nomura Real Estate Partners Co., Ltd.

Revenues(Thousands of yen)
¥4,371,438

Related segment
Real estate leasing business

For the six-month period from June 1, 2014 to November 30, 2014
Name of client
Nomura Real Estate Partners Co., Ltd.

Revenues(Thousands of yen)
¥4,138,897

Related segment
Real estate leasing business

16. BREAKDOWN OF REAL ESTATE RENTAL REVENUES AND EXPENSES
Real estate rental revenues and expenses for the six-month period ended May 31, 2015 and November 30, 2014 consist of the following:
For the period
from December 1, 2014
to May 31, 2015

Thousands of Yen
For the period
from June 1, 2014
to November 30, 2014

¥5,659,317¥5,427,985

5,229,052

5,068,067

4,929,993

4,778,619

299,059

289,448

Other rental revenues

430,265359,918

Parking revenues

129,563

124,612

Incidental income

215,396

160,332

Other miscellaneous revenues

85,30674,9742,543,528

2,353,783

Property management costs

206,540

204,447

Property management fees

318,003

278,923

Property and other taxes

291,945

292,327

Utility expenses

109,072

94,055

Casualty insurance

7,844

7,842

328,354257,383

1,071,655

1,052,024

Real estate rental revenues
Rental revenues
Rental revenues
Common area charges

Real estate rental expenses

Repairs and maintenance
Depreciation
Other rental expenses
Real estate rental profits

210,115

166,782¥3,115,789¥3,074,202

17. BREAKDOWN OF GAIN AND LOSS ON SALES OF REAL ESTATE
Gain and Loss on sales of real estate for the six-month period ended May 31, 2015 and November 30, 2014 consist of the following:
For the period
from December 1, 2014
to May 31, 2015

Thousands of Yen
For the period
from June 1, 2014
to November 30, 2014

Proceeds from sales of real estate¥914,413¥717,606

Cost of sales of real estate

868,016

643,118

Other related sales expenses

27,51021,655Gain on sales of real estate¥18,887¥52,833

Proceeds from sales of real estate¥916,556¥240,472

Cost of sales of real estate

915,646

278,483

Other related sales expenses

16,907

7,271

Loss on sales of real estate¥15,997¥45,282

Gain on sales of real estate

Loss on sales of real estate

18. LEASESThe Company, as a lessor, enters into lease agreements for which fixed monthly rents are due in advance with a lease term of generally two
years for residential space. The future minimum rental revenues under existing non-cancelable operating lease agreements as of May 31,2015 and November 30, 2014 are summarized as follows:
As of May 31, 2015
Due within one year
Due after one year
Total

¥492,833
56,697¥549,530- 50 -

Thousands of Yen
As of November 30, 2014
¥547,770
70,516¥618,286

19. DERIVATIVES AND HEDGE ACCOUNTING
Derivative transactions as of May 31, 2015
(1) There were no derivative financial instruments not subject to hedge accounting.
(2) Derivative financial instruments subject to hedge accounting were as follows:
Thousands of Yen
Notional amount

Hedge accounting
methodType of derivative
instruments

Main hedged item

Special treatment ofinterest-rate swaps

Interest-rate swaps:
Received/floating
and paid/fixedLong-term debt

Due after one year
54,100,000

44,400,000

Fair value

Method used for
determining fair value(*)* Since the derivative financial instruments qualifying for the special treatment of interest-rate swaps are accounted for as one transaction
together with their hedged item, long-term debt, the fair value of these derivatives is included in that of related long-term debt (see “13.
Financial Instruments (Note 2) (iii ) Current portion of long-term debt and (v ) Long-term debt”).
Derivative transactions as of November 30, 2014
(1) There were no derivative financial instruments not subject to hedge accounting.
(2) Derivative financial instruments subject to hedge accounting were as follows:
Thousands of Yen
Notional amount

Hedge accounting
methodType of derivative
instruments

Main hedged item

Special treatment ofinterest-rate swaps

Interest-rate swaps:
Received/floating
and paid/fixedLong-term debt

Due after one year
55,600,000

39,500,000

Fair value

Method used for
determining fair value(*)* Since the derivative financial instruments qualifying for the special treatment of interest-rate swaps are accounted for as one transaction
together with their hedged item, long-term debt, the fair value of these derivatives is included in that of related long-term debt (see “13.
Financial Instruments (Note 2) (iii ) Current portion of long-term debt and (v ) Long-term debt”).

20. SIGNIFICANT SUBSEQUENT EVENTSTransfer of a property
On June 1, 2015, the Company entered into a sale and purchase agreement regarding the transfer of the property stated below and completed
the transfer. Consumption taxes and adjustments of property taxes are excluded from the transfer price.
PRIME URBAN Naka OchiaiType of Assets: Real estate
Date of Agreement: March 31, 2015
Transfer Date
: June 1, 2015
Transfer Price: ¥708,340 thousand
Transferee: Japanese industrial company
Impact on Revenues: Approximately ¥36 million (sales expenses excluded) of gain on sales of real estate will be recorded for the 18th
fiscal period (from June 1, 2015 to September 30, 2015).

PRIME URBAN Kamiuma
Type of Assets: Real estate
Date of Agreement: March 31, 2015
Transfer Date
: June 1, 2015
Transfer Price: ¥905,000 thousand
Transferee: Japanese industrial company
Impact on Revenues: Approximately ¥8 million (sales expenses excluded) of gain on sales of real estate will be recorded for the 18th
fiscal period (from June 1, 2015 to September 30, 2015).

Merger with Nomura Real Estate Master Fund, Inc. and Nomura Real Estate Office Fund, Inc.
NRF, Nomura Real Estate Master Fund, Inc. (“NMF”) and Nomura Real Estate Office Fund, Inc. (“NOF”; and NMF, NRF and NOF are
individually referred to as the “Consolidated Investment Corporation” hereinafter) respectively have determined at each of the board of
directors meetings held on May 27, 2015 to implement a consolidation-type merger (the “Merger”), whereby October 1, 2015 is set as thedate of incorporation of investment corporation (the “New Investment Corporation) incorporated through the consolidation-type merger, andthat the companies have entered into a merger agreement (the “Merger Agreement”) dated May 27, 2015. A proposal of the Merger
Agreement was approved at the general meeting of unitholders on July 31, 2015. The name of the new company following the merger shallbe Nomura Real Estate Master Fund, Inc.
(1) Purpose of Merger
NRF believes that the Merger will expand acquisition opportunities, stabilize the portfolio, enhance risk tolerance, increase competitive
strength for asset acquisitions and stabilize the financial base by increasing the asset size and diversifying target investment sectors. In
addition, NRF believes that it can achieve both growth and stable management by effectively leveraging the wide-range of know-hows and- 51 -

brands held by Nomura Real Estate Group, one of the major comprehensive real estate developers in Japan. As such, NRF is confident that
the Merger is the best option for its unitholders and has therefore entered into the Merger Agreement.
(2) Merger Ratio
Upon the merger, 4.45 New Investment Corporation units will be allotted for each NRF unit, 3.60 New Investment Corporation units will beallotted for each NOF unit and 1 New Investment Corporation units will be allotted for each NMF unit.
(3) Cash Distribution on Merger
Instead of cash distributions for NRF’s final fiscal period ending on September 30, 2015 (the period from June 1, 2015 to September 30,2015), the New Investment Corporation will make a cash distribution on merger to the unitholders listed or recorded on the final unitholders
register of NRF as of the day immediately prior to the date of incorporation of the New Investment Corporation, in an amount equivalent tothe cash distributions for the final fiscal period based on NRF’s distributable profit.
(4) Overview of Preceding Periods of the Consolidated Investment Corporations (NMF (period ended February 2015) and NOF (period
ended April 2015))
NMF (period ended February 2015)
Line of business: Management as investment in specific assets, mainly assets, based on the Investment Trust Act
Operating revenue
10,066 million yen
Net income
4,145 million yen
Assets276,539 million yen
Liabilities
111,272 million yen
Net assets
165,267 million yen
NOF (period ended April 2015)
Line of business: Management as investment in specific assets, mainly assets, based on the Investment Trust Act
Operating revenue
13,025 million yen
Net income
3,613 million yen
Assets439,861 million yen
Liabilities
224,662 million yen
Net assets
215,198 million yen- 52 -

Independent Auditor’s Report- 53 -

Business Structure
Asset Management
Company

Asset Custodian
General Administration

The FundAsset
Management
Services
Agreement

Asset Custody
Agreement

Administration ofUnitholders Register
Management ofSpecial Accounts

Administration
Agreement, etc.

Mitsubishi UFJ
Trust and Banking
Corporation

Property
Information

Information & ResearchService Providers

Nomura Real Estate Residential Fund, Inc.

Nomura Real Estate
Development Co., Ltd.
Nomura Real Estate
Urban Net Co., Ltd.

Accounting
Service
Agreement

General Administration(Accounting, etc.)

Heiseikaikeisha Tax
Corporation
Unitholders Meeting

Specified Related Party

Board of Directors Meeting

Nomura Real Estate
Holdings, Inc.
Nomura Real Estate
Development Co., Ltd.

Financial Agent
Agreement

AuditorErnst & Young ShinNihon LLC

Nomura Real Estate
Partners Co., Ltd.

General Administration(Financial Agent)

The Bank ofTokyo- Mitsubishi UFJ, Ltd.
Sumitomo Mitsui
Banking Corporation

Debt
FinanceFinancial Institutions, etc.

Investment

Debt
Rent, etc.

Residential Properties(Real Estate Related Assets)

Asset
CapitalInvestment

Property Management
Instructions for
Rent &
Management
Rental Strategies,
Plans for
Repairs, etc.

Repaymentof Principal& Interest

Unitholders

EquityProperty Management
Companies
Select the best property
management companies
for each property

Distribution

Unitholders

Corporate Data
Corporate Name
Nomura Real Estate Residential Fund, Inc.
Corporate Office8-5-1 Nishi Shinjuku Shinjuku-ku, Tokyo
160-0023, Japan
http://www.nre-rf.co.jp/english/
Date of Incorporation
August 3, 2006
Stock Listing
Tokyo Stock Exchange (Securities Code: 3240)
Fiscal Period
Six months ending on May 31 and November 30
Capital¥73,231,053,636 (as of May 31, 2015)
Number of Units Issued
160,800 (as of May 31, 2015)

Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation
1-4-5 Marunouchi Chiyoda-ku, Tokyo 100-8212, Japan
Business Office of the Transfer Agent
Corporate Agency Department
Mitsubishi UFJ Trust and Banking Corporation
7-10-11 Higashisuna Koto-ku, Tokyo 137-8081, Japan
Tel: +81-3-5683-5111
Independent Auditors
Ernst & Young ShinNihon LLC
Hibiya Kokusai Bldg. 2-2-3 Uchisaiwai-cho Chiyoda-ku,
Tokyo 100-0011, Japan
Investor Relations
For further information, please contact the Asset Management
Company:
Nomura Real Estate Asset Management Co., Ltd.
8-5-1 Nishi Shinjuku, Shinjuku-ku, Tokyo 160-0023, Japan
Tel: +81-3-3365-7729

Number of Unitholders
10,595(as of May 31, 2015)- 54 -

Nomura Real Estate Residential Fund’s Website
The Company strives to provide accurate and timely disclosure of information by utilizing the website.
・ Strength of NRF, Asset Management Policies, Corporate Profile
・ Portfolio Summary, Portfolio Data, Occupancy Rates.
・ News, Latest Data, Performance, Distributions, Calendar
We continue to provide information timely and strive to enhance the contents of the website.

（URL） http://www.nre-rf.co.jp/english/

Posting the news by year and subject

Posting summaries, maps, occupancy
rates, etc, of the portfolio

Posting the latest occupancy rates

Disclaimer
This semiannual report includes translations of certain Japanese documents originally filed under the Financial Instruments andExchange Act of Japan. This report was prepared in English solely for the convenience of and reference by readers outside Japan andshould not be considered as a disclosure statement. The original Japanese documents always govern the meaning and interpretation.
In general, accounting principles and practices used by real estate investment corporations in Japan (“J-REITs”) in preparing
its financial statements conform with accounting principles generally accepted in Japan (“Japanese GAAP”). However, they may differ
from generally accepted accounting principles applied in certain other countries. Potential investors should consult their own
professional advisors for an understanding of the differences between Japanese GAAP and generally accepted accounting principles in
the United States (“U.S. GAAP”) or other jurisdictions and how those differences might affect the financial information contained
herein.
This document has been prepared for the purpose of provision of information only, and should not be construed as an offer,solicitation or commercial conduct of any nature associated with any specific products. Investors wishing to purchase the investment
units of Nomura Real Estate Residential Fund, Inc. should contact their own securities brokers or dealers. A fee may be charged byyour financial instruments business operator in relation to the sale or purchase of investment units.
Although the information contained in this document is intended to be complete and thorough, there is no assurance of precision andsafety of the same. Please note that the contents of this document is subject to change or cancellation without prior notice.
It is prohibited to make duplication, reproduction, distribution or use of any part or whole of the information contained in this document
without express prior written consent.

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